Problem 3-17 (Static) Cost Flows; T-Accounts; Income Statement [LO3-2, LO3-3, LO3-4] Supreme Videos, incorporated, produces short musical videos for sale to fetall outiets. The company's balance sheet accounts as of January 1, are given below. Becouse 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) ovethead 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 $280,000 in manufacturing overthead for an estimated allocotion base of 7,000 camera hours. The following transactions occurred during the year: b. Film, costumes, and other raw materiais used in production, $200.000 (B5\% of this material was considered ditect to the videos in production, and the other 15% was considered indirect. c. Uelly costs incurred in the production studio, $72,000. d. Depreciatien recorded on the studio, cameras; ond othor equipment, 584,000 . Throe-fourths of this depreciation related to production of the videos, and the remainder related to equpment used in markesing and administration. e. Advertising expense incurred on account, $130000. t. Costs for salaries and wagos were incurred as follows: 9. Prepaid insurance explred during the year, $7,000 pb0s telated to production of videos, and 20O related to marketing and administrative actwites) h. Miscellaneous marketing and administratve expenses incurted, $8,600. 1. Studio (marntacturing) ovetheed wos applied to videos in production. The compony used 7,250 camera-hours during the yoar: 1. Videos that cost $550,000 to produce according to their job cost stieets wore tronsfored to the finished videos warehouse to await sole and shipment k Salet for the year totaled $925,000 and were al on account. The total cost to produce these videos accerding to their job cost sheets was $600,000 1. Colections from customen during the year totaled $850.000. m. Payments to suppliess on account during the yeae, $500,000, payments to employees for salarios and woges, $285,000. Required: 1. Prepare a T-account for each occount on the componys bolance sheet and enter the heginning balances 2. Record the trantactions difectly into the Tiaccounts. Required: 1. Prepare a T-accourk for each account on the company's balance sheet and enter the beginning balances. 2. Record the transactions directly into the T-accounts. 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. Prepare a schedule of cost of goods manufactured. Prepare a schedule of cost of goods sold. Prepare an income statement for the year
