Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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.

image text in transcribedimage text in transcribedimage text in transcribedimage text in transcribedimage text in transcribedimage text in transcribedimage text in transcribed

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. Supreme Videos, Inc. Balance Sheet January 1 Assets Current assets: Cash Accounts receivable Inventories: Raw materials (film, costumes) Videos in process Finished videos awaiting sale Prepaid insurance Total current assets $ 70,000 109,000 $ 37,000 52,000 88,000 177,000 10,400 366,400 Studio and equipment 744,000 Less accumulated depreciation 217,000 527,000 Total assets $893,400 Liabilities and Stockholders' Equity Accounts payable $189,400 Capital stock $427,000 Retained earnings 277,000 Total liabilities and stockholders' equity 704,000 $893,400 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 $240,000 in manufacturing overhead for an estimated allocation base of 5,000 camera-hours. The following transactions occurred during the year: a. Film, costumes, and similar raw materials purchased on account, $192,000 b. Film, costumes, and other raw materials used in production, $207,000 (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, $79,000. d. Depreciation recorded on the studio, cameras, and other equipment, $91,000. 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, $137,000. f. Costs for salaries and wages were incurred as follows: Direct labor (actors and directors) Indirect labor (carpenters to build sets, costume designers, and so forth) Administrative salaries $ 89,000 $117,000) $102,000

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Cost Accounting A Managerial Emphasis

Authors: Charles T. Horngren, Srikant M. Datar, Madhav V. Rajan

14th Global Edition

978-0273753872, 0273753878

More Books

Students also viewed these Accounting questions

Question

What is the use of bootstrap program?

Answered: 1 week ago

Question

What is a process and process table?

Answered: 1 week ago

Question

What is Industrial Economics and Theory of Firm?

Answered: 1 week ago

Question

Write each fraction as a percent. 7 50

Answered: 1 week ago

Question

Identify the main contents of this book.

Answered: 1 week ago