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: January 1 December 31

Raw material 75,000 100,000

Work in process 105,000 140,000

Finished goods 120,000 125,000

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