Question

Cost Sheets; Overhead Rates; Journal Entries Kenworth Company em- ploys a job-order costing system. Only three jobs-job 105, job 106, and job 107—were worked on during November and December. Job 105 was completed on December 10; the other two jobs were still in production on December 31, the end of the company's operating year. Job cost sheets on the three jobs are given below: Job Cost Sheet 32.000 Job 105 Job 106 Job 107 .. $16,500 13,000 $ 9,300 7,000 11,200 20,800 November costs incurred: Direct materials ...... Direct labor............ Manufacturing overhead .... December costs incurred: Direct materials ........ Direct labor .......... Manufacturing overhead ...... 8,200 6,000 4,000 ? 21,300 10,000 The following additional information is available: a. Manufacturing overhead is assigned to jobs on the basis of direct labor cost. b. Balances in the inventory accounts at November 30 were as follows: $40,000 Raw Materials ....... Work in Process ..... Finished Goods ...... 85,000

6) Prepare all journal entries for all product costs for Dec below in good form

7) what is the balance in manufacturing overhead T-account at Dec 31 and should anything be done with it and if so prepare a journal entry

Answer 1

Part-6)

Particulars	Debit	Credit
Work in Process ($8,200 + $21,300)	29,500
Manufacturing Overhead	4,000
Raw Materials		33,500
Work in Process ($4,000 + $6,000 + $10,000 )	20,000
Manufacturing Overhead	8,000
Salaries and Wages Payable		28,000
Manufacturing Overhead	19,000
Accounts Payable		19,000

Part-7)

November overhead cost / November overhead cost = 20,800 / 13000 = 160%

Job 105: $4,000 × 160%	6,400
Job 106: $6,000 × 160%	9,600
Job 107: $10,000 × 160%	16,000
Total applied overhead	32,000

Particulars	Debit	Credit
Work in Process	32,000
Manufacturing Overhead		32,000

Direct materials	16,500
Direct labour ($13,000 + $4,000)	17,000
Manufacturing overhead applied ($17,000 × 160%)	27,200
Total cost of Job 105	60,700

Particulars	Debit	Credit
Finished goods	60,700
Work in Process		60,700