Current Attempt in Progress Waterway Wings, Inc. manufactures airplanes for use in stunt shows. Waterway's factory is highly automated, using the latest in robotic technology. To keep costs low, the company employs as few factory workers as possible. Since each plane has different features (such as its shape, weight, and color), Waterway uses a job order costing system to accumulate product costs. At the end of 2020, Waterway's accountants developed the following expectations for 2021 based on the marketing department's sales forecast: Budgeted overhead cost $1,050,000 Estimated machine hours 50,000 Estimated direct labor hours 9,000 Estimated direct materials cost $1.500,000 Waterway's inventory count, completed on December 31, 2020, revealed the following ending inventory balances Raw Materials inventory $250,000 Work in Process Inventory $625.000 Finished Goods Inventory $3,230,000 The company's 2021 payroll data revealed the following actual payroll costs for the year Number Wage Rate per Hour Employed Annual Salary per Employee $224,000 Total Hours Worked per Employee 1 Job Title President and CEO Vice president and CFO Factory manager Assistant factory manager 1 $178.000 1 $40,700 1 $30.800 Machine operator 5 $15 2.250 Security guard. factory 2 $20.600 Number Employed Wage Rate per Hour Annual Salary per Employee $224.000 Total Hours Worked per Employee Job Title 1 1 $178,000 1 $40.700 $30.800 1 President and CEO Vice president and CFO Factory manager Assistant factory manager Machine operator Security guard, factory Forklift operator Corporate secretary Janitor, factory 5 $15 2.250 2.250 2 $20,600 $8 2.000 2 1 $36,000 2 $6 2.150 The following information was taken from Waterway's Schedule of Plant Assets. All assets are depreciated using the straight-line method Plant Asset Useful Life 20 Years Factory building Administrative office Factory equipment Purchase Price Salvage Value $4,000,000 $150,000 $650,000 $125,000 $2,000,000 $20,000 30 Years 12 Years Other miscellaneous costs for 2020 all paid in cash included: Cost Amount $12,300 Factory insurance (fully expired) Administrative office utilities $5.500 Factory utilities $31.300 Cost Factory insurance (fully expired) Administrative office utilities Factory utilities Office supplies (fully consumed) Amount $12.300 $5,500 $31,300 $4,200 Additional information about Waterway's operations in 2020 includes the following: Raw materials purchases for the year amounted to $1.950,000. All materials were purchased on account The company used $1,870,000 in raw materials during the year. Of that amount, 85% was direct materials and 15% was indirect materials. Waterway applied overhead to Work in Process Inventory based on direct materials cost. Airplanes costing $3,450,000 to manufacture were completed and transferred out of Work in Process Inventory Waterway uses a markup of 150% to price its airplanes, Sales for the year were $6,570,000. All sales are made on account. (Note: This transaction requires two journal entries.) (a) Your answer is correct What was Waterway's predetermined overhead rate in 2021? Predetermined overhead rate 70 of direct materials cost Prepare the appropriate T-accounts for Raw Materials inventory, Work-in-Process Inventory, Finished Goods inventory. Manufacturing Overhead Control, Cost of Goods Sold, and Sales, and record Waterway's transactions for 2021. Calculate the ending balance in each account. (Past entries in order presented in the problem. Round answers to decimal places, eg 5,275.) Raw Materials Work in Process Inventory > > > Finished Goods Inventory > > > >
