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 laws. It has a centrally located factory in a U.S. dily 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 responsable 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 Wil'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
For the Month of November
Work in process, October 31			$52400
Direct materials
Raw materials inventory, October 31	$38400
Add: Purchases of raw materials	184600
Total raw materials available for sale	223000
Less: Raw materials inventory, November 30	-52600
Direct materials used in production		170400
Direct labor		42000
Manufacturing overhead:
Depreciation- Factory equipment	16700
Factory supplies used	16800
Factory utilities	10200
Indirect labor	47600
Rent- Factory equipment	46600
Repairs- Factory equipment	4500
Total manufacturing overhead		142400
Total manufacturing costs			354800
Total cost of work in process			407200
Less: Work in process, November 30			-41900
Cost of goods manufactured			$365300

WATERWAYS CORPORATION
Income Statement
For the Month of November
Sales			$1358200
Cost of goods sold
Finished goods inventory, October 31		$72800
Add; Cost of goods manufactured		365300
Cost of goods available for sale		438100
Less: Finished goods inventory, November 30		-69000
Cost of goods sold			369100
Gross profit			989100
Operating expenses
Administrative expenses
Depreciation- Office equipment	2400
Office supplies expense	1600
Office administrative expense	71700
Salaries	326000
Total administrative expenses		401700
Selling expenses
Advertising expense	53500
Sales commissions	40600
Total selling expenses		94100
Total operating expenses			495800
Net income			$493300

WATERWAYS CORPORATION
Balance Sheet (Partial)
As of November
Assets
Current Assets
Cash		$260100
Accounts receivable		273000
Inventories
Raw materials inventory	52600
Work in process	41900
Finished goods inventory	69000
		163500
Prepaid expenses		41500
Total current assets		$738100