Star Videos, Inc., produces short musical videos for sale to retail outlets. The company's balance sheet accounts as of January 1 are given below Star videos, Inc Balance Sheet January 1 Assets $ 90,200 96,200 Accounts receivable Inventories: $20,200 56,800 81,800 Raw materials (film, costumes) Videos in process 158,800 12,700 542,000 $899,900 Finished videos awaiting sale Prepaid insurance Studio and equipment (net) Total assets Liabilities and Stockholders' Equity Accounts payable Retained earnings Total liabilities and stockholders' equity 156,000 743,900 $899,900 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 ($40 per camera-hour) is based on a cost formula that estimated $280,000 in manufacturing overhead for an estimated allocation base of 7,000 camera-hours. Any underapplied or overapplied overhead is closed to cost of goods sold. The following transactions were recorded for the year: a. Film, costumes, and similar raw materials purchased on account, $193,500 b. Film, costumes, and other raw materials issued to production, $207,500 (85% of this material was considered direct to the videos in production, and the other 15% was considered indirect) c. Utility costs incurred (on account) in the production studio, $91,800. d. Depreciation recorded on the studio, cameras, and other equipment, $91,600. Three-fourths of this depreciation related to actual production of the videos, and the remainder related to equipment used in marketing and administration. e. Advertising expense incurred (on account), $173,500. f. Salaries and wages paid in cash as follows: $ 97,600 $88,500 $95,400 Direct labor (actors and directors) Indirect labor (carpenters to build sets, costume designers, and so forth) Administrative salaries