1. 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
   	$57,800 of indirect materials)	$624,600
   Direct labor (including $86,700 maintenance salaries)		578,300
   Factory overhead:
   	Supervisor salariesplant	532,000
   	Heat, light, and powerplant	144,600
   	Sales salaries	358,500
   	Promotional expenses	323,800
   	Insurance and property taxesplant	156,100
   	Insurance and property taxescorporate offices	225,500
   	Depreciationplant and equipment	127,200
   	Depreciationcorporate offices	92,500
   Total		$3,163,100

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

   1. The maintenance salaries of $86,700 and indirect materials of $57,800 should be included as factory overhead.

   2. The indirect materials of $57,800 should be included as factory overhead.

   3. The maintenance salaries of $86,700 should be included as factory overhead.

   4. Half of the maintenance salaries of $86,700 and indirect materials of $57,800 should be included as factory overhead.

   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.

   b. Prepare a corrected report.

   Marching Ants Inc.
   Manufacturing Costs
   For the Quarter Ended June 30
   Factory overhead:
   Total factory overhead
   Total