A partial list of Waterwaysâ accounts and their balances for the month of November follows.Accounts Receivable $ 295,000Advertising Expenses 54,000Cash 260,000DepreciationâFactory Equipment 16,800DepreciationâOffice Equipment 2,500Direct Labor 22,000Factory Supplies Used 16,850Factory Utilities 10,200Finished Goods Inventory, November 30 68,300Finished Goods Inventory, October 31 72,550Indirect Labor 48,000Office Supplies Expense 1,400Other Administrative Expenses 72,000Prepaid Expenses 41,250Raw Materials Inventory, November 30 52,700Raw Materials Inventory, October 31 38,000Raw Materials Purchases 185,400RentâFactory Equipment 47,000RepairsâFactory Equipment 4,200Salaries 325,000Sales 1,350,000Sales Commissions 40,500Work In Process Inventory October 31 52,900Work In Process Inventory, November 30 42,000Instructions(a) Based on the information given, construct an organizational chart of Waterways Corporation(b) A list of accounts and their values are given above. From this information, prepare a cost of goods manufactured schedule, an income statement, and the current assets section of the balance sheet for Waterways Corporation for the month of November.WATERWAYS CONTINUING PROBLEM: WCP18(This is a continuation of the Waterways Problem from Chapters 14 through 17.)Vice President for Sales and Marketing Sam Totter is trying to plan for the coming year in terms of production needs to meet the sales demand. He is also trying to determine ways in which the companyâs profits might be increased in the coming year.Instructions(a) Waterways markets a simple water control and timer that it mass-produces. During the year, the company sold 696,000 units at an average selling price of $4.22 per unit. The variable expenses were $2,053,200, and the fixed expenses were $683,338.(1) What is the productâs contribution margin ratio?(2) What is the companyâs break-even point in units and in dollars for this product?(3) What is the margin of safety, both in dollars and as a ratio?(4) If management wanted to increase its income from this product by 10%, how many additional units would have to be sold to reach this income level?(5) If sales increase by 71,090 units and the cost behaviors do not change, how much will income increase on this product?(b) Waterways is thinking of mass-producing one of its special-order sprinklers. To do so would increase variable costs for all sprinklers by an average of $0.71 per unit. The company also estimates that this change could increase the overall number of sprinklers sold by 10%, and the average sales price would increase $0.25 per unit. Waterways currently sells 491,740 sprinkler units at an average selling price of $26.50. The manufacturing costs are $6,863,512 variable and $2,050,140 fixed. Selling and administrative costs are $2,661,352 variable and $794,950 fixed.(1) If Waterways begins mass-producing its special-order sprinklers, how would this affect the company?(2) If the average sales price per sprinkler unit did not increase when the company began mass-producing the special-order sprinkler, what would be the effect on the company?
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