Supreme Videos, Incorporated, produces short musical videos for sale to retall outlets. The company's balance sheet accounts as of January 1 ore given below. Because the videos differ in length and complexity of production, the company uses a job-order costing system to dotermine the cost of each video produced. Studio (manulacturing) overhead is charged to videos based on camera-hours of activity. The company/s predetermined overhead rate for the year is based on a cost formula that estimated $200,000 in manufacturing overhead for an estimated allocation base of 5,000 camera-hours. The following transactions occurred during the year: a. Fim, costumes, and similar taw materials purchased on account, $199,000 b. Film, costumes, and other raw materials used in production, $214,000 (75\% of this materiat was direct to the videos in production, and the other 25% was indirect). c. Utility costs incurred in the production studia, $86,000. d. Depreciation on the studio, cameras, and other equipment, 598.000 . Throe-fourths of this depreciation reloted to production of the videos, and the remaindet telated to equipment used in marketing and administration. e. Advertising expense incurred on account, $144,000. e. Advertising expense incurred on account, $144,000. f. Costs for salaries and wages were incurred as follows: 9. Prepald insurance explred during the year, $8,400 (70\% related to production of videos, and 30% related to marketing and administrative activities). h. Miscellaneous marketing and administrative expenses incurred, $10,000. i. Studio (manufacturing) overhead was applied to videos in production. The company used 9,000 camera-hours during the year. 1. Videos that cost $564,000 to produce were transferred to the finished videos warehouse, k. Sales for the year totaled $953,000 and were all on account. The total cost to produce these videos was $614,000. 1. Collections from customers during the year totaled $864,000. m. Payments to suppliers on account during the year, $514,000; payments to employees for sataries and wages, $321,000. Required: 1. Prepare a T-account for each account on the company's balance sheet and enter the beginning balances. 2. Record the transactions in the T-accounts. Key your entries to the letters (a) through (m) above. 3. is the Studio (manufacturing) Overhead account underapplied or overapplied? By how much? 4. Prepare a schedule of cost of goods manufactured. 5. Propare a schedule of cost of goods sold. 6. Prepare an income statement. Complete this question by entering your answers in the tabs below. Is the Studio (manufacturing) Overhead account underapplied or overapplied? By how much
