The final processing department in Marys production facility began the year with no work in process inventory. During the year, 290,000 units were transferred in from the prior processing department and 254,000 units were completed and sold. Costs transferred in from the prior department totaled $81,200,000. No materials are added in the final processing department. A total of $18,436,300 of conversion cost was incurred in the final processing department during the year.

1. Tom Winthrop estimated that the units in ending work in process inventory in the final processing department were 25% complete with respect to the conversion costs of the final processing department. If this estimate of the percentage completion is used, what would be the cost of goods sold for the year?

2. Does Gary Stevens want the estimated percentage completion to be increased or decreased?

3. What percentage completion would result in increasing reported net operating income by $58,420 over the net operating income that would be reported if the 25% figure were used?