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: Becouse the videos differ in iength and in complexty of production, the company uscs a job-order costing system to determino the cost of eoch video produced. Studio (manufocturing) overhead is charged to videos on the basis of camera-hours of activhy. The company's predetermined overhead rate for the year ( $40 per camera houn) is based on a cost formula that ostinated $280,000 in manufacturing ovemead for an estimated allocation base of 7,000 camero-hours. Any underappled or overapplied overhead is closed to cost of goods sold. The following transactlons were recorded for the year a. Film, costumes, and similat raw moteribls purchased on account, $210,000 b. Fim, costumes, ond other raw materials is sued to production, $234,500 (85\% of this material was considered direct to the videos in 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 underapplled or overopplled overhead is closed to cost of goods sold. The following transactions were recorded for the year: a. Film, costumes, and similar raw moterials purchased on account, $210,000. b. Film, costumes, and other raw materials issued to production, $234,500 (85\% of this material was considered direct to the videos in production, and the other 15% wos considered indirect. c. Utility costs incurred (on account) in the production studio, $78,400. d. Depreciation recorded on the studio, cameras, and other equipment, $86,800. Three-fourths of this depreciation related to actual production of the videos, and the remainder related to equipment used in marketing ond administration. e. Advertising expense incurred (on account), $154,500 1. Salaries and wages paid in cash as follows: 9. Prepaid insurance expired during the year, $8,700(70% related to production of videos, and 30% related to morketing and 9. Prepaid Insurance expired during the year, $8,700 (70\% related to production of videos, and 30% related to marketing and administrative activities). h. Miscellaneous marketing and administrative expenses incurred (on account), $11,450. 1. Studio (manufacturing) overhead was appiled to videos in production. The company recorded 7,250 camera-hours of activity during the year. 1. Videos that cost $554,000 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 $1,026,000 and were all on account. 1. The total cost to produce the videos that were sold according to their job cost sheets was $598,230. m, Collections from customers during the year totaled $976,000. n. Payments to suppliers on account during the year, $592,000. o, Underapplied or overapplled overhead $ ? Required: 1. Prepare a transaction analysis that records all of the above transactions. 2. Prepare a sehedule of cost of goods manufactured for the year. 3. Prepare a schedule of cost of goods soid for the your. 4. Prepare an income statement for the yeac, Complete this question by entering your answers in the tabs below
