Scenario 2 - Jack Johnson

Jack Johnson operates a small manufacturing business as a sole proprietor. His business, Johnson Rubber, manufactures industrial seals and also makes rubber bands used in packaging. He uses the accrual method of accounting. He incurred the following expenses during the tax year.

Calculate Jack's cost of goods sold. (Disregard UNICAP rules for this problem.)

Calculate Jack's cost of goods manufactured. (Disregard UNICAP rules for this problem.)

Beginning inventory, raw material. $ 14,000

Beginning inventory, work-in-process $20,000

Beginning inventory, finished goods $100,000

Ending inventory, raw materials $15,000

Ending inventory, work-in-process $12,000

Ending inventory, finished goods $110,000

Purchases, factory. $2,000,000

Salaries, factory. $200,000 Salaries, sales. $50,000 Chemicals used in manufacturing process $10,000

Office supplies. $5,000 Freight-in for raw materials purchased. $3,000

Answer the following question based on the scenario for Jack Johnson. Select the total cost of goods manufactured:

a) $2,221,000

b) $2,210,000

c) $2,213,000

d) $2,203,000