Waterways Continuing Problem WCP2 and WCP3

Waterways Continuing Problem(This is a continuation of the Waterways Problem from Chapter 1)WCP2 Waterways has two major public-park projects to provide with comprehensiveirrigation in one of its service locations this month. Job J57 and Job K52 involve 15 acresof landscaped terrain which will require special-order sprinkler heads to meet the specificationsof the project. Using a job cost system to produce these parts, the followingevents occurred during December 2012.Raw materials were requisitioned from the company’s inventory on December 2 for$5,061; on December 8 for $1,059; and on December 14 for $3,459. In each instance, twothirds(2/3) of these materials were for J57 and the rest for K52.Six time tickets were turned in for these two projects for a total amount of 18 hoursof work. All the workers were paid $16.50 per hour. The time tickets were dated December 3,December 9, and December 15. On each of those days, 6 labor hours were spent on thesejobs, two-thirds (2/3) for J57 and the rest for K52.The predetermined overhead rate is based on machine hours. The expected machinehour use for the year is 2,112 hours, and the anticipated overhead costs are $840,576for the year. The machine were used by workers on projects K52 and J57 on December 3, 9,and 15. Six machine hours were used for project K52 (2 each day), and 8.5 machine hourswere used for project J57 (2.5 the first day and 3 each of the other days). Both of thesespecial orders were completed on December 15, producing 237 sprinkler heads for J57and 142 sprinkler heads for K52.Additional job order activities during this period of time included:Dec. 1 Purchased raw materials from Durbin Supply Company on account for $53,200.Dec. 2 Issued $40,000 of direct materials from the company’s inventory to jobs otherthan K52 and J57 and $3,000 of indirect materials.Dec. 12 Paid Waterways’ factory salaries and wages in the amount of $65,000.Dec. 13 Paid the factory’s water bill of $9,000.Dec. 18 Transferred $50,000 of costs from other completed jobs to finished goods.Dec. 21 Paid the factory’s electric bill of $12,000 for Waterways’ factory.Dec. 31 Made adjusting entries for the factory that included accrued property taxes of$12,000, prepaid insurance of $8,800, and accumulated depreciation of $16,000.Instructions(a) Set up the job cost sheets for Job No. J57 and Job No. K52. Determine the total costfor each manufacturing special order for these jobs. (Round unit cost to nearest cent.)(b) Journalize the activities from these job cost sheets in the general journal. Also journalizethe other costs that occurred during this period of time.(c) Assuming that Manufacturing Overhead has a debit balance of $3,600, determinewhether overhead has been under/over applied and make the adjusting entry.(d) Why would Waterways choose machine hours as the cost driver for the overheadrather than direct labor cost? What would Waterways be likely to choose as the costdriver for the overhead for the job of installing the irrigation system and why?Waterways Continuing Problem(This is a continuation of the Waterways Problem from Chapters 1 and 2. The asterisk*indicates material discussed in the chapter appendix.)WCP3 Because most of the parts for its irrigation systems are standard, Waterways handlesthe majority of its manufacturing as a process cost system. There are multiple processdepartments. Three of these departments are the Molding, Cutting, and Welding departments.All items eventually end up in the Package department which prepares items forsale in kits or individually.The following information is available for the Molding department for January.Work in process beginning:Units in process 22,000Stage of completion for materials 80%Stage of completion for labor and overhead 30%Costs in work in process inventory:Materials $168,360Labor 67,564Overhead 17,270Total costs in beginning work in process $253,194Units started into production in January 60,000Units completed and transferred in January 58,000Costs added to production:Materials $264,940Labor 289,468Overhead 60,578Total costs added into production in January $614,986Work in process ending:Units in process 24,000Stage of completion for materials 50%Stage of completion for labor and overhead 10%Instructions(a) Prepare a production cost report for Waterways using the weighted-average method.*(b) Show the equivalent units for materials and conversion costs if Waterways used FIFOinstead of weighted-average