4 Supreme Videos, Inc. produces short musical videos for sale to retail outlets. The company's balance sheet accounts as of January 1, are given below boo 118.000 Supree Videos, Inc. Balance Sheet January 1 Assets Current assets: Cash Accounts receivable Inventories Raw materials (5., costumes Videos in process Finished videos in sale Prepold Insurance Total current assets Studio and quiet Les accumulated depreciation Total assets Libilities and Stockholders' quity Accounts payable Capital stock Retained Total Italities and stockholdersity 5 45,000 24.000 97.900 167.000 13.00 376,200 762.000 220.000 530.000 5012,200 5121.200 5505,000 5912,200 Because the videos differ in length and in complexity of production the companyies job-order costing system to determine the cost of each Video produced Studio manufacturing overhead is charged to videos on the basis of camera-hours of activity. The Ches 4. Because the videos differ in length and in complexity of production, the company uses a job order costing system to determine the cost of each video produced Studio (manufacturing) overhead is charged to videos on the basis of camera hours of activity. The company's predetermined overhead rate for the year is based on a cost formula that estimated $294,000 in manufacturing overhead for an estimated allocation base of 7,000 camera-hours. The following transactions occurred during the year. a. Film, costumes, and similar raw materials purchased on account. $201.000 b. Film, costumes, and other raw materials used in production S216,000 (80% of this material was considered direct to the videos in production, and the other 20% was considered indirect). c. Utility costs incurred in the production studio $88,000 d. Depreciation recorded on the studio, cameras, and other equipment $100,000 Three-fourths of this depreciation related to production of the videos, and the remainder related to equipment used in marketing and administration e Advertising expense incurred on account. $146,000 Costs for salaries and wages were incurred as follows $ 98,000 A Direct labor (actors and directors) Indirect labor (carpenters to build sets, costume designers, and so forth) Administrative salaries 5 126.000 5111,000 Prepaid insurance expired during the year 58 600 75 related to production of videos, and 25 related to marketing and administrative activities) h Miscellaneous marketing and administrative expenses incurred $10.200 Studio manufacturing overhead was applied to videos in production The company used 8 600 camera-hours during the year CARCERATA 4 $ 98,000 Direct labor (actors and directors) Indirect labor (carpenters to build sets costume designers, and so forth) Administrative salaries $126,000 $ 111,200 g. Prepaid insurance expired during the year. $8,600 (75% related to production of videos, and 25% related to marketing and administrative activities) h Miscellaneous marketing and administrative expenses incurred. $10 200. Studio (manufacturing) overhead was applied to videos in production The company used 8.600 camera houts during the year Videos that cost $566,000 to produce according to their job cost sheets were transferred to the finished videos warehouse to await sale and shipment k Sales for the year totaled 5957000 and were all on account the total cost to produce these videos according to their job cost sheets was $616 000 Collections from customers during the year totaled $866000 m. Payments to suppliers on account during the year. $510,000 payments to employees for salaries and wages, 323,000 Required: 1 Prepare a Taccount for each account on the company's balance sheet and enter the beginning balances 2. Record the transactions directly into the T-accounts Key your entries to the letters (a) through m) above 3. Is the Studio (manufacturing Overhead account underapplied or overapplied for the year? By how much? 4. Prepare a schedule of cost of goods manufactured 5. Prepare a schedule of cost of goods sold. 6. Prepare an income statement for the year Complete this question by entering your answers in the tabs below. N Req 1 and 2 Reg 3 Reg 4 Reg 5 Reg 6 is the Studio (manufacturing) Overhead account underapplied or overapplied for the year? By how much? Manufacturing overhead was by for the year Prepare a schedule of cost of goods manufactured. Supreme Videos, Inc. Schedule of Cost of Goods Manufactured Direct materials Total raw materials available Raw materials used in production Direct materials used in production Total manufacturing costs added to production Total manufacturing costs to account for Cost of goods manufactured
