Durable Concrete mixes and trucks concrete to construction sites. The company uses a standard costing system for the batches of concrete produced. The company has a fleet of 10 mixing trucks, each of which goes on three runs per day, 250 days per year under normal circumstances. The standard costs are as follows:
Standard costs per batch based on 750 batches per yearAmount
Raw materials—gravel, sand, cement, chemicals…………………………….$ 1,500
Wages…………………………………………………………………………….500
Variable overhead—mixing truck depreciation, diesel, etc……………………...200
Fixed overhead—depreciation on raw materials silos…………………………...300
Total production cost per batch……………………………………………..S 2.500
Opening inventory cost—all raw materials……………………………..$1,200,000
Ending inventor)' cost—all raw materials………………………………..$ 900,000
During 2013, the company received an unusually large order for a big construction project. As a result, Durable Concrete had to extend its operating hours and days, temporarily increasing output to 900 batches for the year. The company used the first-in, first-out cost flow assumption. Actual variable costs approximated standard costs per batch. Depreciation rates established at the beginning of the year remain valid for the year.
Required:
Determine the amount of cost of goods sold for 2013.