=+EX 18-7 Classifying costs in a service company obj. 2 Chapter 18 Managerial Accounting Concepts and Principles 843

f. Safety training costs g. Cost to lease (rent) train locomotives.

h. Wages of train engineers i. Cost of track and bed (ballast) replacement j. Costs of accident cleanup k. Fuel costs l. Maintenance costs of right of way, bridges, and buildings The following report was prepared for evaluating the performance of the plant manager of Second Hand Inc. Evaluate and correct this report.

Second Hand Inc.

Manufacturing Costs For the Quarter Ended March 31, 2010 Materials used in production (including

$50,000 of indirect materials) . . . . . . . . . . . . . . . . . . . $ 540,000