Mike Cichanowski founded Wenonah Canoe andlater purchased Current Designs, a company thatdesigns and manufactures kayaks. The kayak-manufacturing facilityis located just a few minutes from the canoe company’s headquartersin Winona, Minnesota.
Current Designs makes kayaks using two different processes. Therotational molding process uses high temperature to meltpolyethylene powder in a closed rotating metal mold to produce acomplete kayak hull and deck in a single piece. These kayaks areless labor-intensive and less expensive for the company to produceand sell.
Its other kayaks use the vacuum-bagged composite lamination process(which we will refer to as the composite process). Layers offiberglass or Kevlar® are carefully placed by hand in amold and are bonded with resin. Then, a high-pressure vacuum isused to eliminate any excess resin that would otherwise add weightand reduce strength of the finished kayak. These kayaks require agreat deal of skilled labor as each boat is individually finished.The exquisite finish of the vacuum-bagged composite kayaks gaverise to Current Designs’ tag line, “A work of art, made forlife.”
Current Designs has the following managers:
| Mike Cichanowski, CEO |
| Diane Buswell, Controller |
| Deb Welch, Purchasing Manager |
| Bill Johnson, Sales Manager |
| Dave Thill, Kayak Plant Manager |
| Rick Thrune, Production Manager for Composite Kayaks |
(c) When Diane Buswell, controller for CurrentDesigns, reviewed the accounting records for a recent period, shenoted the cost items and amounts shown below (amounts are assumed).Enter the amount for each item in the appropriate cost category.Then sum the amounts in each cost category column.
| | | | | | ProductCosts | | |
| Payee | | Purpose | | Amount | | Direct
Materials | | Direct
Labour | | Manufacturing
Overhead | | Period
Costs |
| Winona Agency | | Property insurance for the manufacturing plant | | 3,120 | | $ | | $ | | $ | | $ |
| Bill Johnson (sales manager) | | Payroll check—payment to sales manager | | 1,700 | | | | | | | | |
| Xcel Energy | | Electricity for manufacturing plant | | 440 | | | | | | | | |
| Winona Printing | | Price lists for salespeople | | 90 | | | | | | | | |
| Jim Kaiser (sales representative) | | Sales commissions | | 1,300 | | | | | | | | |
| Dave Thill (plant manager) | | Payroll check—payment to plant manager | | 1,590 | | | | | | | | |
| Dana Schultz (kayak assembler) | | Payroll check—payment to kayak assembler | | 740 | | | | | | | | |
| Composite One | | Bagging film used when kayaks are assembled;
it is discarded after use | | 250 | | | | | | | | |
| Fastenal | | Shop supplies—brooms, paper towels, etc. | | 900 | | | | | | | | |
| Ravago | | Polyethylene powder which is the main ingredient
for the rotational molded kayaks | | 3,340 | | | | | | | | |
| Winona County | | Property taxes on manufacturing plant | | 5,670 | | | | | | | | |
| North American Composites | | Kevlar® fabric for composite kayaks | | 4,670 | | | | | | | | |
| Waste Management | | Trash disposal for the company office building | | 670 | | | | | | | | |
| None | | Journal entry to record depreciation of
manufacturing equipment | | 4,900 | | | | | | | | |
| Totals |
