Happy Factory Ltd uses a job-order costing system, and the factory incurred the following transactions during a period.

A. Raw materials purchased on accounts for $80,000.

B. Raw materials assigned to the job#: $55,000 direct and $15,000 indirect.

C. Factory payroll incurred, $150,000: General Labour costs are not included

D. Factory labour costs assigned to the job#: $90,000 direct and $60,000 indirect

E. Factory overhead assigned to production using a predetermined overhead

F. Additional overhead costs were billed, $50,000

G. Jobs completed and transferred to finished goods at cost, $160,000.

H. Jobs with a cost of $130,000 were sold on account for $275,000

I. Under/Over-applied overheads were closed off to the Cost of Sales account

Additional information

• The inventory balances at the beginning of the period were $35,000 for raw materials, $45,000 for work in process and $65,000 for finished goods.
• Assume the opening balances of other extracted T-accounts were zero.

Note:

• The factory applies factory overhead (FOH) to work-in-process inventory using a budgeted overhead rate. The budgeted overhead rate is $10 per machine hour. The factory used 10,000 machine hours during the period.
• The factory does not use Overhead Applied and Under/Over-applied Overhead accounts; applied overhead is credited to the Factory Overhead accounts before the actual overhead are incurred, and it is debited to Work in Process Inventory account.
• Any difference in the balances in the Factory overhead account will be closed off to Cost of Sales account directly.