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Classifying Costs

The following is a manufacturing cost report of Marching Ants Inc.

Marching Ants Inc. Manufacturing Costs For the Quarter Ended June 30
Materials used in production (including
	$66,900 of indirect materials)	$723,000
Direct labor (including $100,400 maintenance salaries)		669,400
Factory overhead:
	Supervisor salariesplant	615,800
	Heat, light, and powerplant	167,400
	Sales salaries	415,000
	Promotional expenses	374,900
	Insurance and property taxesplant	180,700
	Insurance and property taxescorporate offices	261,100
	Depreciationplant and equipment	147,300
	Depreciationcorporate offices	107,100
Total		$3,661,700

Question Content Area

a. 1. Select the correct sentence for errors in the preceding report.

1. The maintenance salaries of $100,400 and indirect materials of $66,900 should be included as factory overhead.

2. The indirect materials of $66,900 should be included as factory overhead.

3. The maintenance salaries of $100,400 should be included as factory overhead.

4. Half of the maintenance salaries of $100,400 and indirect materials of $66,900 should be included as factory overhead.

1, 2, 3 or 4

a. 2. Select the correct sentence for errors in the preceding report.

1. Sales salaries, promotional expenses, corporate office insurance and property taxes, and corporate office depreciation should not be included in factory overhead.

2. Promotional expenses, corporate office insurance and property taxes, and corporate office depreciation should not be included in factory overhead.

3. Sales salaries, promotional expenses, corporate office insurance and property taxes should not be included in factory overhead.

4. Half of sales salaries, promotional expenses, corporate office insurance and property taxes, and corporate office depreciation should not be included in factory overhead.

1, 2, 3 or 4

Question Content Area

b. Prepare a corrected report.

Marching Ants Inc. Manufacturing Costs For the Quarter Ended June 30

Cost of direct materials used in production Depreciation-corporate offices Maintenance salaries Sales salaries.

$- Select -

Direct labor Indirect materials Insurance and property taxes-plant Promotional expenses

- Select -Factory overhead:

Direct labor Maintenance salaries Promotional expenses Sales salaries

$- Select -

Cost of materials used in production Depreciation-corporate offices Direct labor Indirect materials.

- Select -

Direct labor Promotional expenses Sales salaries Supervisor salaries-plant

- Select -

Cost of materials used in production Depreciation-corporate offices Insurance and property taxes-corporate offices Heat, light, and power-plant.

- Select -

Direct labor Direct materials Insurance and property taxes-corporate offices Insurance and property taxes-plant

- Select -

Depreciation-corporate offices Depreciation-plant and equipment Promotional expenses Sales salaries

- Select -Total factory overhead fill in the blank

Total$