1. 360 Property Videos Company is a service company that creates in-home videos for Real Estate agents to help sell/rent the house.
Assume the Company uses a Process Costing system to allocate costs amount its two departments: Videotaping, Editing, and Posting. As of Oct 1st, only $800 of WIP - Videotaping was left over.
In Oct, $52,400 worth of videotaping materials was used and $10,000 of materials for editing was used. Factory Labor costs for the videotaping department was $104,600, editing was $35,000, and Posting was $12,000. Manufacturing overhead costs are assigned based on factory labor dollars. Estimated overhead for the entire year is $400,000 and estimated factory labor is $100,000.
The company transfers all services from videotaping to editing by Oct 20th, but the editing department is only able to complete and transfer 50% of the cost to posting during Oct. The Posting department transferred $100,000 of completed services to finished goods services and sold for a 125% markup on account.
a. Prepare all the necessary journal entries for the month of October (6 points).
b. Figure out the ending balances for all of the Work in process accounts and the Cost of goods/services sold account.