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. Accounts Receivable Advertising Expenses Cash Depreciation-Factory Equipment Depreciation-Office Equipment Direct Labor Factory Supplies Used Factory Utilities Finished Goods Inventory, November 30 Finished Goods Inventory, October 31 Indirect Labor Office Supplies Expense Other Administrative Expenses $277,700 53.700 259,200 16,900 2.400 42,500 16,700 10,100 69,300 72,500 48,300 1,600 72,400

Answer 1

WATERWAYS CORPORATION
Cost of Goods Manufactured Schedule
For the Month of November
Work in process inventory, October 31			52200
Direct materials
Raw materials inventory, October 31	37800
Raw material purchases	185300
Total raw materials available for use	223100
Less: Raw materials inventory, November 30	52200
Direct materials used		170900
Direct labor		42500
Manufacturing overhead
Depreciation-factory equipment	16900
Factory supplies used	16700
Factory utilities	10100
Indirect labor	48300
Rent-factory equipment	47500
Repairs-factory equipment	4500
Total manufacturing overhead		144000
Total manufacturing costs			357400
Total cost of work in process			409600
Less: Work in process inventory, November 30			42200
Cost of Goods Manufactured			367400

WATERWAYS CORPORATION
Income Statement
For the Month of November
Sales revenue			1353600
Cost of goods sold
Finished goods inventory, October 30		72500
Cost of goods manufactured		365000
Cost of goods available for sale		437500
Less: Finished goods inventory, November 30		69300
Cost of goods sold			368200
Gross profit			985400
Selling and administrative expenses
Selling expenses
Advertising expenses	53700
Sales commissions	40100
Total selling expenses		93800
Administrative expenses
Salaries	322400
Depreciation-office equipment	2400
Office supplies expense	1600
Other administrative expenses	72400
Total administrative expenses		398800
Total selling and administrative expenses			492600
Net operating income			492800

WATERWAYS CORPORATION
Balance Sheet (partial)
November 30
Assets
Current assets
Cash		259200
Accounts receivable		277700
Inventories
Finished goods	69400
Work in process	42200
Raw materials	53100
		164700
Prepaid expenses		41600
Total current assets		743200