Detailed Answer
Answer (B) is correct.
This solution requires a series of computations.
Beginning raw materials................... $38,000
Add: net purchases raw materials ......$115,000
Materials available.......................... $153,000
Less: ending materials......... ............(45,000)
Materials used in production............. $108,000
Direct labor.................................... 236,000
Manufacturing overhead Factory rent ..$59,000
Factory depreciation......................... 18,700
Material handling costs...................... 35,800
Total Manufacturing overhead............. 113,500
Total manufacturing costs................. $457,500
Add: beginning work-in-process........... 21,000
Less: ending work-in-process............. (10,000)
Costs of Goods Manufactured............. $468,500
Add: beginning finished goods ............78,000
Less: ending finished goods ..............(107,000)
Cost of Goods Sold ..........................$439,500