Problem 3-28 Cost Flows; T-Accounts, Income Statement [L031. LO3-2. LO3-5, LO36, LO3-7] Supreme Videos, Inc, produces short musical videos for sale to retail outlets The company's balance sheet accounts as of January 1, the beginning of its fiscal year, are given below Supreme Videos, Inc Balance Sheet January 1 Assets Current assets Cash Accounts receivable $63,000 102,000 Raw materials (ilm, costumes) Videos in process Finished videos awaiting sale $30,000 45,000 81,000 156,000 9,000 330,000 520,000 $850,000 Prepaid insurance Total current assets Studio and equipment 730,000 210,000 Total assets Liabalties and Stockholders' Equity Accounts payable Capital stock Retained earnings $160,000 270,000690,000 $850,000 $420,000 Total liabilities and stockholders' equity Because the wdeos dfter in length and r, complexity of producton, the corpory uses a pt rder costing system to determine the cost of each video produced Studio (manufacturing) overhead is charged to videos on the basis of camera-hours of actrvity. The company's predetermined overhead rate for the year is based on a cost formula that estimated $280,000 in manufacturing overhead for an estimated allocation base of 7,000 camera-hours. The following transactions were recorded for the year a Film, costumes, and similar raw materials purchased on account, $185,000 b Film, costumes, and other raw matenals issued to producton, S20000 (85% of tas matenal was considered direct to the vdeos in production and the other 15% was considered niecn c Utility costs incurred in the production studio, $72,000 d Depreciation recorded on the studio, cameras, and other equipment, $84,000 Three-fourths of this depreciation related to actual production of the videos, and the remander related to equipment used in marketing and administration e Advertising expense incurred, $130,000 I Costs for salaries and wages were incurred as follows $ 82,000 Direct labor (actors and directors) Indirect labor (carpenters to build sets costume designers, and so forth) Administrative salaries $110,000 S 95,000 g Prepaid insurance expired dunng the year, S7,000 80% related to product n of wdeos and 20% related to marketing and administrative activibes) h Miscellaneous marketing and administrative expenses incurred, $8,600 1 Studio (manufacturing) overhead was applied to videos in production. The company recorded 7.250 camera hours of activity during the year i Videos that cost $550,000 to produce according to their job cost sheets were transferred to the finished