Fletcher, Inc. disposes of under- or overapplied overhead at year-end as an adjustment to cost of goods sold. Prior to disposal, the firm reported cost of goods sold of $623,000 in a year when manufacturing overhead was underapplied by $21,500. If sales revenue totaled $1,500,000, determine (1) Fletcher's adjusted cost of goods sold and (2) gross margin. Adjusted Cost of Goods Sold Gross Margin A. $ 601,500 $ 877,000 B. $ 601,500 $ 898,500 C. $ 623,000 $ 877,000 D. $ 644,500 $ 855,500 E. $ 644,500 $ 877,000