A parent sells merchandise to its subsidiary at a markup of 20% on cost. In the current year, the subsidiary had $120,000 in merchandise purchased from the parent in its beginning inventory. During the current year, the subsidiary paid the parent $720,000 for merchandise, and sold merchandise purchased from the parent to outside customers for $870,000. At year-end, the subsidiary has $180,000 in merchandise purchased from the parent in its ending inventory.

What is consolidated cost of goods sold?

Select one:

A.$550,000

B.$660,000

C.$600,000

D.$1,150,000

B is incorrect