Because most of the parts for its irrigation systems are standard, Waterways handles the majority of its manufacturing as a process cost system. There are multiple process departments. Three of these departments are the Molding, Cutting, and Welding departments. All items eventually end up in the Package department which prepares items for sale in kits or individually. The following information is available for the Molding department for January.

Work in process beginning: Units in process 22,000 Stage of completion for materials 80% Stage of completion for labor and overhead 30%

Costs in work in process inventory: Materials $168,360 Labor 67,564 Overhead 17,270 Total costs in beginning work in process $253,194

Units started into production in January 60,000 Units completed and transferred in January 58,000

Costs added to production: Materials $264,940 Labor 289,468 Overhead 60,578 Total costs added into production in January $614,986

Work in process ending: Units in process 24,000 Stage of completion for materials 50% Stage of completion for labor and overhead 10%

Collapse question part (a) Prepare a production cost report for Waterways using the weighted-average method. (Round unit costs to 2 decimal places, e.g. 2.25.)

WATERWAYS CORPORATION

Molding Department Production Report

Equivalent Units

Quantities Physical Units Materials Conversion Costs

Units to be accounted for

Work in process, Jan. 1

Started into production

Total units

Units accounted for

Transferred out

Work in process, Jan 31

Total units

Costs Materials Conversion Costs Total

Unit costs

Costs in January $ $ $

Equivalent units

Unit costs $ $ $

Costs to be accounted for

Work in process, Jan. 1 $

Started into production

Total costs $

Cost Reconciliation Schedule

Costs accounted for

Transferred out $

Work in process, Jan. 31

Materials

Conversion costs

Total costs $

Factory Overhead Cost Budget

Sweet Tooth Company budgeted the following costs for anticipated production for August:

Prepare a factory overhead cost budget, separating variable and fixed costs. Assume that factory insurance and depreciation are the only fixed factory costs.

2.

Sales and Production Budgets

Sonic Inc. manufactures two models of speakers, Rumble and Thunder. Based on the following production and sales data for June, prepare (a) a sales budget and (b) a production budget.

a. Prepare a sales budget.

Cash Flow Analysis -- SAB Technology SAB Technology Corporation increased its sales from $400,000 in 2012 to $500,000 in year 2013 as is shown in the firm’s income statements presented below. Jenny Sands, chief executive officer (CEO) and founder of the firm expressed concern that the cash account and the firm’s marketable securities declined substantially between 2012 and 2013. SAB's complete balance sheets are also shown below. Ms. Sands is seeking your assistance in the preparation of a statement of cash flows for SAB Financial Statements 1 Income statement (in $ Thousands) 2013 2012 2 3 Net sales 500.00 400.00 4 Less: cogs 300.00 240.00 5 Gross profit 200.00 160.00 6 Less: operating exp 46.00 46.00 7 Less: Depr 30.00 25.00 8 EBIT 124.00 89.00 9 Less: Interest 38.50 33.50 10 Income before tax 85.50 55.50 11 Less: Income taxes 30.00 20.00 12 Net income 55.50 35.50 13 14 Cash dividend 20.00 17.00 15 Addition to retained earnings 35.50 18.50 16 17 18 Balance sheet (in $ Thousands) 2013 2012 19 20 Cash 16.00 39.00 21 Account receivable 80.00 50.00 22 Inventories 204.00 151.00 23 Current asset 300.00 240.00 24 Gross fixed asset 290.00 200.00 25 less: accumuled depr 125.00 95.00 26 Net fixed asset 165.00 105.00 27 Total assets 465.00 345.00 28 29 Account payable 45.00 30.00 30 Accrued liabilities 23.00 10.00 31 Short-term notes 27.00 20.00 32 Total current liabilities 95.00 60.00 33 Long-term debt 20.00 15.00 34 Total liabilities 115.00 75.00 35 Common stock 129.50 85.00 36 Retained earnings 220.50 185.00 37 Owners' equity 350.00 270.00 38 Total liabilities and equity 465.00 345.00 ~~~~~~~~~~~~~~~~~~ 1) Study the excel template:1 From question per unit 2 3 computer chips 70 <-- from question 4 plastic casings 15 <-- from question 5 assembly hardware 5 <-- from question 6 direct labor 5 <-- from question 7 total cost 95 <-- from question 8 price 142.5 <-- from question 9 10 Sales 11 Jan Feb Mar 1st Qtr 12 13 units of sales 200 400 800 1400 <-- from question 14 dollar sales ?? ?? ?? ?? <-- from question 15 16 Cost of production schedule 17 18 per unit Jan Feb Mar 1st Qtr 19 Production 500 500 500 1500 <-- from question 20 Production Cost 21 computer chips 70 ?? ?? ?? ?? <-- prodution * unit cost 22 plastic casings 15 ?? ?? ?? ?? <-- prodution * unit cost 23 assembly hardware 5 ?? ?? ?? ?? <-- prodution * unit cost 24 direct labor 5 ?? ?? ?? ?? <-- prodution * unit cost 25 Total production cost 95 ?? ?? ?? ?? <-- prodution * unit cost 26 27 Cost of goods sold schedule 28 29 per unit Jan Feb Mar 1st Qtr 30 Units of sales 200 400 800 1400 <-- from question 31 Sales ?? ?? ?? ?? <-- price * unit of sales 32 Cost of goods sold 95 ?? ?? ?? ?? <-- sales * unit cost 33 Gross profit ?? ?? ?? ?? <-- sales - cost of goods sold 34 35 Inventories schedule 36 Jan Feb Mar 37 Beginning finished goods ?? ?? ?? <-- previous ending inventories 38 Production 39 Materials ?? ?? ?? <-- computer + plastic + assembly 40 Direct labor ?? ?? ?? <-- labor 41 Additions ?? ?? ?? <-- sum of materials and labor cost 42 Total (beg + additions) ?? ?? ?? <-- beginning + additions 43 Less: cost of goods sold ?? ?? ?? <-- cogs 44 Ending finished goods ?? ?? ?? <-- ending inventories 45 46 47 48 49 Jan Feb Mar 1st Qtr 50 Total production cost ?? ?? ?? ?? 51 Sales ?? ?? ?? ?? 52 Cost of goods sold ?? ?? ?? ?? 53 Beginning finshed goods ?? ?? ?? 54 Ending finished goods ?? ?? ?? 2) Cash flow analysis for year 2013 cash flows from operating activities = ?? cash flow from investment activities = ?? cash flow from financing activities = ?? net cash flow = ?? cash at the end of period = ?? 3) Cash flow identity for year 2013 Operating cash flow = EBIT + D&A - Tax = ?? Change in Net Operating Working Capital = Change in NOWC = ?? Net Capital Spending = ?? Cash flow from assets = ?? Cash flow to creditors = ?? Cash flow to Shareholders = ??

Define the following: fixed cost, variable cost, marginal cost and marginal revenue

Why are the terms direct cost and indirect cost independent of the terms fixed cost and variable cost? Give an example to illustrate.

What generally happens to the cost of debt, cost of equity, and cost of capital when a firm increases Debt and holds Equity constant?

Promoting the Financial Planning Cruise to Better Horizons Credit Union Members

Write a sales message to Better Horizons members to promote the financial planning cruise. Feel free to add additional details (i.e., price and dates for the cruise).

Must be Persuasive!!!

Scenario: Christine Russo works at Better Horizons and is developing several new services the credit union could offer. One idea is for credit union members to take a five-day cruise to the Bahamas. Two afternoons of the cruise will be devoted to financial planning workshops, including choices such as retirement planning, trusts and estates, insurance, charitable giving, taxes, and college savings. Also, a finance boot camp for teenagers will provide basic information about savings and checking accounts, loans, and budgeting.

In another initiative, Christine wants to set up a new rewards program for credit union members who use their Better Horizons debit or credit cards. Each purchase with the debit or credit card will contribute to their total reward points, which customers can redeem for brand-name merchandise, hotel accommodations, airline tickets, cruises, and other travel options (detailed in an online and paper merchandise and travel catalog). Members get one point for each dollar spent on their credit cards and one point for every two dollars spent on their debit cards. One advantage of the program is that points can be combined across accounts. So, family members Page 331or friends who are members of the credit union can transfer their points to one another’s accounts and more quickly gain rewards. The program involves no fee, and members with the cards are automatically enrolled in the program.

Altira Corporation provides the following information related to its merchandise inventory during the month of August 2021:

Required:
Using calculations based on a periodic inventory system, determine the inventory balance Altira would report in its August 31, 2021, balance sheet and the cost of goods sold it would report in its August 2021 income statement using each of the following cost flow methods.