Waterways Corporation is a private corporation formed for the purpose of providing the products and the services needed to irrigate farms, parks, commercial projects, and private lawns. It has a centrally located factory in a U. S. city that manufactures the products it markets to retail outlets across the nation. It also maintains a division that performs installation and warranty servicing in six metropolitan areas. The mission of Waterways is to manufacture quality parts that can be used for effective irrigation projects that also conserve water. By that effort, the company hopes to satisfy its customers, perform rapid and responsible service, and serve the community and the employees who represent them in each community. The company has been growing rapidly, so management is considering new ideas to help the company continue its growth and maintain the high quality of its products. Waterways was founded by Will Winkman who is the company president and chief executive officer (CEO). Working with him from the company’s inception is Will’s brother, Ben, whose sprinkler designs and ideas about the installation of proper systems have been a major basis of the company’s success. Ben is the vice president who oversees all aspects of design and production in the company. The factory itself is managed by Todd Senter who hires his line managers to supervise the factory employees. The factory makes all of the parts for the irrigation systems. The purchasing department is managed by Helen Hines. The installation and training division is overseen by vice president Henry Writer, who supervises the managers of the six local installation operations. Each of these local managers hires his or her own local service people. These service employees are trained by the home office under Henry Writer’s direction because of the uniqueness of the company’s products. There is a small human resources department under the direction of Sally Fenton, a vice president who handles the employee paperwork, though hiring is actually performed by the separate departments. Teresa Totter is the vice president who heads the sales and marketing area; she oversees 10 well-trained salespeople. The accounting and finance division of the company is headed by Ann Headman, who is the chief financial officer (CFO) and a company vice president; she is a member of the Institute of Management Accountants and holds a certificate in management accounting. She has a small staff of accountants, including a controller and a treasurer, and a staff of accounting input operators who maintain the financial records. A partial list of Waterways’ accounts and their balances for the month of November follows. Accounts Receivable $273,100Advertising Expenses 54,300Cash 258,300Depreciation—Factory Equipment 16,700Depreciation—Office Equipment 2,400Direct Labor 41,700Factory Supplies Used 16,600Factory Utilities 10,100Finished Goods Inventory, November 30 68,500Finished Goods Inventory, October 31 72,200Indirect Labor 47,800Office Supplies Expense 1,600Other Administrative Expenses 72,700Prepaid Expenses 40,900Raw Materials Inventory, November 30 52,900Raw Materials Inventory, October 31 37,700Raw Materials Purchases 183,200Rent—Factory Equipment 47,000Repairs—Factory Equipment 4,500Salaries 325,600Sales Revenue 1,348,000Sales Commissions 40,900Work In Process Inventory October 31 52,400Work In Process Inventory, November 30 41,600