Kenworth Company uses 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. Data from the job cost sheets of the three jobs are given below:

The following additional information is available:
a. Manufacturing overhead is applied to jobs on the basis of direct labor cost.
b. Balances in the inventory accounts at November 30 were as follows:

Raw Materials . . . . . . . . . $40,000
Work in Process . . . . . . . . ?
Finished Goods . . . . . . . . $85,000
Required:
1. Prepare T-accounts for Raw Materials, Work in Process, Finished Goods, and Manufacturing Overhead. Enter the November 30 inventory balances given above; in the case of Work in Process, compute the November 30 balance and enter it into the Work in Process T-account.
2. Prepare journal entries for December as follows:
a. Prepare an entry to record the issue of materials into production and post the entry to appropriate T-accounts. (In the case of direct materials, it is not necessary to make a separate entry for each job.) Indirect materials used during December totaled $4,000.
b. Prepare an entry to record the incurrence of labor cost and post the entry to appropriate T-accounts. (In the case of direct labor cost, it is not necessary to make a separate entry for each job.) Indirect labor cost totaled $8,000 for December.
c. Prepare an entry to record the incurrence of $19,000 in various actual manufacturing overhead costs for December (credit Accounts Payable). Post this entry to the appropriate T-accounts.
3. What apparent predetermined overhead rate does the company use to assign overhead cost to jobs? Using this rate, prepare a journal entry to record the application of overhead cost to jobs for December (it is not necessary to make a separate entry for each job). Post this entry to the appropriate T-accounts.
4. As stated earlier, Job 105 was completed during December. Prepare a journal entry to show the transfer of this job off of the production line and into the finished goods warehouse. Post the entry to the appropriate T-accounts.
5. Determine the balance at December 31 in the Work in Process inventory account. How much of this balance consists of costs charged to Job 106? Job107?

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Job Cost Sheet Job 105 Job 106 Job 107 November costs incurred: Direct materials Direct labor $16,500 $13,000 $20,800 $9,300 $7,000 $11,200 December costs incurred: Direct materials .. Direct labor Manufacturing overhead S8,200 $6,000 $21.300 $10,000 $4,000