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Ruth's Holiday Styles has been busy during November! The company carries an inventory of decorative items it its store and installs them in creative ways. The MOH costs are fairly low, since the company has small space for inventory; the applied MOH rate is $$10$ per direct labor hour.

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

DM Inventory $$7,400$

WIP Inventory $9,150$

FG Inventory $0$

During December the following events occurred.

$1.$ Purchased $($on account$)$ direct materials costing $$15,000$

$2.$ Used $$20,500$ of direct materials for jobs

$3.$ Paid direct labor wages for $139$ hours of labor @ $($$$25/$hr$)$

$4.$ Applied MOH cost to jobs

$5.$ Incurred $$3,300$ in MOH costs

$6.$ Completed all jobs by end of the month

$7.$ Billed clients $$47,600$ for jobs completed

$8.$ Closed $($under or overapplied$)$ MOH using the direct write off method

$($a$)$: calculate the ending balances in all nventory accounts as of December $31$

Ending Balances

DM Inventory $$\_\_\_\_\_\_\_\_$

WIP Inventory $$\_\_\_\_\_\_\_\_$

FG Inventory $$\_\_\_\_\_\_\_\_$

$($b$)$: Prepare the journal entry to write off any under or overapplied MOH directly to COGS

Accounts Title & Explanation Debit Credit

$\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_$

$\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_$

$($ c$)$: Determine the company's total COG's completed and COG's in December

Total COG completed and COGS $$\_\_\_\_\_\_\_\_\_\_\_\_\_$

$($d$)$: How much gross margin did the company earn in December

Gross Margin $$\_\_\_\_\_\_\_\_\_\_\_\_\_$

Gross Margin percentage $\_\_\_\_\_\_\_\_\_\_\_\_\%$

If Ruth had a goal of earning a $35\%$ gross margin, did she reach her goal?

$($Yes$/$NO$),$ she $($did$/$did not$)$ reach her goal because $\_\_\_\_\_\_\%$ is $($higher$,$ lower, similar$)$ than her $35\%$ goal

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