Question

Classifying Costs

The following report was prepared for evaluating the performance of the plant manager of Marching Ants Inc. Evaluate and correct this report.

Marching Ants Inc.
Manufacturing Costs
For the Quarter Ended June 30
Materials used in production (including     
    $33,200 of indirect materials)   $359,000
Direct labor (including $49,900 maintenance salaries)   332,400
Factory overhead:     
    Supervisor salaries   305,800
    Heat, light, and power   83,100
    Sales salaries   206,100
    Promotional expenses   186,100
    Insurance and property taxes—plant   89,700
    Insurance and property taxes—corporate offices   129,600
    Depreciation—plant and equipment   73,100
    Depreciation—corporate offices   53,200
Total   $1,818,100

Answer 1

Indirect materials and Maintenance salaries should be included in Factory Overhead
Supervisor salaries, Sales salaries,Promotional expenses,Insurance and property taxes—corporate offices and Depreciation—corporate offices have been wrongly included in Factory overhead.
The correct report is as follows:
MARCHING ANTS INC.
Manufacturing Costs
For the Quarter Ended June 30
Cost of direct materials used in production		325800	=359000-33200
Direct labor		282500	=332400-49900
Factory overhead:
Maintenance salaries	49900
Indirect materials	33200
Supervisor salaries	305800
Heat, light, and power	83100
Insurance and property taxes—plant	89700
Depreciation—plant and equipment	73100	634800
Total		1243100