Raw materials inventory, January 1 $20,000

Raw materials inventory, December 31 10,000

Work in process inventory, January 1 6,000

Work in process inventory, December 31 9,000

Finished goods inventory, January 1 16,000

Finished goods inventory, December 31 20,000

Raw materials purchases 400,000

Direct labor 200,000

Factory utilities 75,000

Indirect labor 45,000

Factory depreciation 180,000

Selling & administrative expenses 210,000

Assume goods manufactured is $870,000.

The cost of goods sold is:

a. $866,000.

b. $874,000.