Lucky Textile asks advice concerning the installation of a cost system. The manufacturer explains briefly that many different cloths are produced, starting with scoured wool that passes through the following processing before becoming finished cloth: picking and blending, carding, spinning, weaving, finishing, and dyeing. The companys sales representatives take orders considerably in advice of the actual production of the cloth, using samples produced during a special period set aside each season for the manufacture of samples. Competition is keen and the profit margin is low. The financing is received through bank loans. Lucky textile had the following transactions in its first month of operations relating to its only Job #101. a. Purchased 500 yards of silk @ Rs.8 per yard for cash. b. Requisitioned 300 yards of silk to produce Job #101. c. Incurred 50 hours of direct labor to produce Job #101; the average labor rate is Rs.9 per hour. d. Paid various factory overhead costs, Rs.650. e. Applied factory overhead at the rate of 150% of direct labor costs to Job #101. f. Completed Job #101. g. Sold Job #101 at 20% mark up. Required: 1. As cost accountant why are you using job order costing in JJ garments? 2. Enter the transactions in the T-accounts and determine the ending balances of following accounts. a. Raw material inventory b. Work in Process c. Finished Goods d. Cost of goods sold e. Factory overheads 3. Prepare Job #101 cost sheet. 4. Is factory over applied or under applied, and by how much?