a1)

Using the information provided, recreate Waterways statements for this division using condensed, three-year comparative income statements.

QUESTION B: Using the information provided, prepare condensed, three-year comparative income statements using the variable-costing method (SEE ATTACHED TEMPLATE)

QUESTION C: Reconcile the variable-costing income with the absorption-costing income calculated in part (a1)

Print by: Aaron Chan ACCT355v11:ACCT 355v11: Cost Analysis/Assignment 2 Waterways Continuing Problem-8 (Part Level Submission) When Waterways' management met to review the year-end financial statements, the room was filed with excitement Sales had been exceptional during the year and every department had exceeded the budget and last year's sales totals. Several years ago Waterways had implemented a bonus system based on percentage of sales over budget, and the managers were expecting healthy cheques at the end of the year. Yet the plant manager, Ryan Smith, was stunned into sience when he read the bottom line on the income statement for manufacturing operations. It was showing a lossl He immediately approached the CFO asking for an explanation. Ryan wondered, "Why did we go through all that trouble and inconvenience to adopt those cost-cutting measures when they had the opposte effect?" One of those measures was to move toward lean manufacturing. The CFO retriev ed the following information with respect to the top-selling ine from the manufacturing operations for the last three years. Production on this ine began on January 1, 2014 2014 2015 2016 Beginning inventory of finished units Production in units Sales in units Selling price Direct material Direct labour Variable manufacturing overhead Variable sel ing and administration Fixed manufacturing ovehead Fixed selling and administraton 140,000 140,000 140,000 66,000 70,125 51,000 56,000 60,125 71,000 $29 $29 $4. 561,000 561,000 561,000 Waterways uses the absorption-costing method and accounts for inventory using FIFO. Using the information provided, recreate Waterways' statements for this division using condensed, three-year comparative income statements. WATERWAYS CORPORATION Absorption Costing Income Statement For the year ending December 31 2014 2015 2016 Attempts: 0 of 1 used The parts of this question must be completed in order. This part will be available when you complete the part above. The parts of this question must be completed in order. This part will be ava ilable when you complete the part above. or nelated companes Alrghs reser