Question

Waterways Corporation is a private corporation formed for the purpose of providing the products and the services needed to irrigate farms, parks, commercial projects, and private lawns. It has a centrally located factory in a U.S.city that manufactures the products it markets to retail outlets across the nation. It also maintains a division that performs installation and warranty servicing in six metropolitan areas. The mission of Waterways is to manufacture quality parts that can be used for effective irrigation projects that also conserve water. By that effort, the company hopes to satisfy its customers, perform rapid and responsible service, and serve the community and the employees who represent them in each community. The company has been growing rapidly, so management is considering new ideas to help the company continue its growth and maintain the high quality of its products. Waterways was founded by Will Winkman who is the company president and chief executive officer (CEO). Working with him from the company's inception is Will's brother, Ben, whose sprinkler designs and ideas about the installation of proper systems have been a major basis of the company's success. Ben is the vice president who oversees all aspects of design and production in the company. The factory itself is managed by Todd Senter who hires his line managers to supervise the factory employees. The factory makes all of the parts for the irrigation systems. The purchasing department is managed by Helen Hines. The installation and training division is overseen by vice president Henry Writer, who supervises the managers of the six local installation operations. Each of these local managers hires his or her own local service people. These service employees are trained by the home office under Henry Writer's direction because of the uniqueness of the company's products. There is a small human resources department under the direction of Sally Fenton, a vice president who handles the employee paperwork, though hiring is actually performed by the separate departments. Teresa Totter is the vice president who heads the sales and marketing area; she oversees 10 well-trained salespeople. The accounting and finance division of the company is headed by Ann Headman, who is the chief financial officer (CFO) and a company vice president; she is a member of the Institute of Management Accountants and holds a certificate in management accounting. She has a small staff of accountants, including a controller and a treasurer, and a staff of accounting input operators who maintain the financial records. A partial list of Waterways' accounts and their balances for the month of November follows.

Answer 1

WATERWAYS CORPORATION
Cost of Goods Manufactured Schedule
For the Month of November
Work in process inventory, November 1			52700
Direct materials
Raw materials inventory, November 1	38200
Raw material purchases	182800
Total raw materials available for use	221000
Less: Raw materials inventory, November 30	53100
Direct materials used		167900
Direct labor		42200
Manufacturing overhead
Depreciation-factory equipment	16800
Factory supplies used	17000
Factory utitlities	10100
Indirect labor	48500
Rent-factory equipment	47500
Repairs-factory equipment	4500
Total manufacturing overhead		144400
Total manufacturing costs			354500
Total cost of work in process			407200
Less: Work in process inventory, November 30			42200
Cost of Goods Manufactured			365000

WATERWAYS CORPORATION
Income Statement
For the Month of November
Sales revenue			1348900
Cost of goods sold
Finished goods inventory, November 1		72200
Cost of goods manufactured		365000
Cost of goods available for sale		437200
Less: Finished goods inventory, November 30		69400
Cost of goods sold			367800
Gross profit			981100
Selling and administrative expenses
Selling expenses
Advertising expenses	53500
Sales commissions	40600
Total selling expenses		94100
Administrative expenses
Salaries	327300
Depreciation-office equipment	2300
Office supplies expense	1500
Other administrative expenses	72100
Total administrative expenses		403200
Total selling and administrative expenses			497300
Net operating income			483800

WATERWAYS CORPORATION
Balance Sheet (partial)
November 30
Assets
Current assets
Cash		261600
Accounts receivable		272500
Inventories
Finished goods	69400
Work in process	42200
Raw materials	53100
		164700
Prepaid expenses		41600
Total current assets		740400