Michelle’s Holiday Styles has been busy in the month of November! It seems Michelle’s marketing efforts have paid off, as she has answered many calls to help decorate homes for the upcoming holidays. The company carries an inventory of decorative items in its store and then installs them in creative and fun ways. The MOH costs are fairly low, since the company has just a small space to hold the inventory. The applied MOH rate is $10 per direct labor hour. As of November 30, the company carries the following balances in its inventory accounts. DM Inventory $7,600 WIP Inventory 9,350 FG Inventory 0 During December, the following events occurred. 1. Purchased direct materials costing $16,100 on account. 2. Used $20,700 of direct materials for jobs. 3. Paid direct labor wages for 141 hours of labor ($25/hr). 4. Applied MOH cost to jobs. 5. Actually incurred $3,500 in MOH costs. 6. Completed all jobs by the end of the month. 7. Billed clients $48,400 for jobs completed. 8. Closed under- or overapplied MOH using the direct write-off method. (a) Calculate the ending balances in all inventory accounts as of December 31. Ending Balances DM Inventory $enter a dollar amount WIP Inventory $enter a dollar amount FG Inventory $enter a dollar amount

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Michelle’s Holiday Styles has been busy in the month of November! It seems Michelle’s marketing efforts have paid off, as she has answered many calls to help decorate homes for the upcoming holidays. The company carries an inventory of decorative items in its store and then installs them in creative and fun ways. The MOH costs are fairly low, since the company has just a small space to hold the inventory. The applied MOH rate is $10 per direct labor hour.

As of November 30, the company carries the following balances in its inventory accounts.

DM Inventory		$7,600
WIP Inventory		9,350
FG Inventory		0

During December, the following events occurred.

1.		Purchased direct materials costing $16,100 on account.
2.		Used $20,700 of direct materials for jobs.
3.		Paid direct labor wages for 141 hours of labor ($25/hr).
4.		Applied MOH cost to jobs.
5.		Actually incurred $3,500 in MOH costs.
6.		Completed all jobs by the end of the month.
7.		Billed clients $48,400 for jobs completed.
8.		Closed under- or overapplied MOH using the direct write-off method.

(a)

Calculate the ending balances in all inventory accounts as of December 31.

		Ending Balances
DM Inventory		$enter a dollar amount
WIP Inventory		$enter a dollar amount
FG Inventory		$enter a dollar amount

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part c:\

Determine the company’s total cost of goods completed and COGS in December.

Total cost of goods completed and COGS

$enter the total cost of goods completed and cost of goods sold in dollars

part d:

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