Disney faces many situations where it needs to apply the decision tools learnad in this chapter, such as using a job cost sheet to determine a film's profitahility, For example, assume Disney uses a job onder cost system and applies overhead to production of its films on the hasis of direct labor cost. In computing a predetennined overhead rate for the year 2020, the company estimated film production overhead to be $24 million and direct labor costs to he $20 million. In addition, it devcloped the following information. Actual Costs Incurred During 2020 Direct materials used $30.000.000 Direct labor cost incurrad 21.000,000 Insurance, studio 5.00.000 Indirect labor 7.500.000 Studio maintenance 1.000.000 Rent on studio building 11.000.000 Depreciation on studio equipment 2.000.000

Instructions Answer each of the following. a. Why is Disney using a job order cost system? b.On what basis does Disney apply its film production overhead? Compule the predaterminod overhicad rate for 2020, c. Compute the amount of the under- or overapplied overhead for 2020. d. Disney had balances in the beginning and ending films in process and finished films accounts satollas 1/1/20 12/31/20 Films in process $ 5,000,000 4,000,000 Finishad films 13,000,000 11.000,000 Determine the (I) cost of films produced and (2) cost of films sold for Disney during 2020. Assume that any under- or overpplied overhead should be included in the cost of films sold. e. During 2020, Film G408 (a short documentary film produced for a customer) was started and complated. Its cost sheet showed a total cost of S100,000, and Disney prices its film at SO% above its cost. What is the price to the customer if the company follows this pricing strategy?