Problem 1: The following selected information is provided about a manufacturing company:

Raw material purchases 800,000 Direct labor 420,000 Overhead applied 730,000 Actual overhead 745,000 Selling and administrative salaries 500,000 Other selling and administrative expenses 185,000

Sales revenue 5,000,000

Inventory data: Raw material

Work in process

Finished goods

January 1 75,000 105,000 120,000

December 31 100,000 140,000 125,000

Calculate the cost of goods sold. Assume that under/over applied overhead is closed directly to cost of goods sold.