Question

This is what you will turn in for Chap 1 . The problem is called Waterways on page 1-40. I want you to use the data shown and do part b, create a cost of manufacturing, cost of goods sold, and an income statement. No need to do the balance sheet, although there are balance sheet accounts listed. Do not use the balance sheet accounts in calculating Cost of goods sold, except for the beginning and ending inventories. Use spreadsheet or pencil & paper and upload to the assignment spot. We will have a short amount of time in class on Monday for questions. Feel free to ask questions before class on the discussion spot.

Notes;

where it says Salaries $325,000 - those are period cost, not manufacturing

Prepaid expenses - this is a balance sheet account not manufacturing or period cost

The beginning inventories are the ones for Oct 31, the ending are Nov 30 - this is just a one month thing

sales commissions are a form of sales salaries

Writer's di- rection 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 run 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, in- cluding 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 Prepaid Expenses Raw Materials Inventory, November 30 Raw Materials Inventory, October 31 Raw Materials Purchases Rent-Factory Equipment $ 275,000 54.000 260,000 16,800 2,400 42,000 16,800 10.200 68,800 72,550 48,000 1,600 72,000 41.250 52,700 38.000 184,500 47,000

Answer 1

169800 42000 211800 Statement of Cost of Goods manufactured For the Month ended November 30 Direct material consumed: Inventory Oct. 31 38000 Add Cost of Raw material Purchased 184500 Total Raw material Available 222500 Less Inventory 30 Nov. -52700 Raw material consumed Direct Labor Prime cost Factory Overhead Indirect labor 48000 Depreciation on factory equipment 16800 Utilities- Factory 10200 Rent Factory Equipment 47000 Supplies Factory used 16800 Repairs factory equipment 4500 Total Manufacturing Overhead: Total Manufacturing cost Add Work in progress 31 Oct. 143300 355100 52700 407800 42000 449800 Less Work in progress Nov. 30 Cost of Goods Manufactured