Snack Smart, Inc., is a manufacturer of prepacked snack food for the health conscious consumer. The companys raw materials inventory only contains direct materials. During the year, the company purchased $13,500 of direct materials. The ending raw materials inventory balance was $2,000 higher than the beginning raw materials inventory balance.

The company incurred the following additional factory costs:

rent	$4,000
depreciation	$4,500
utilities	$2,500
indirect labor	$3,100
indirect materials	$250

On the companys cost of goods sold scheduled prepared at year end, the cost of goods manufactured for the year was $25,000 and there was a net decrease of $2,250 in finished goods inventory.

Which of the following statements is incorrect assuming the company uses an actual costing system to account for manufacturing overhead, and

direct

laborers were paid $7,500 during the year?