Shelby Cabinets, Inc. produces custom cabinets. The following inventory balances appeared on its balance sheet. 12/31/2012

12/31/2011

Raw materials inventory

$ 8,000

$ 10,000

Work-in-process inventory

600,000

550,000

Finished goods inventory

350,000

410,000

Shelby Cabinets had $1,265,000 in sales for the year ended December 31, 2012. The company also had the following costs for the year:

Selling

$ 90,000

General and administrative

$240,000

Raw materials purchases

$100,000

Direct labor used in production

$125,000

Manufacturing overhead

$630,000

Of the total raw materials placed in production for the year, $12,000 was for indirect materials and must be deducted to find direct materials placed in production.

Using the above information, what was Shelby’s Cost of Goods Manufactured?

(Hint: You must first calculate Direct materials placed in production before calculating the Cost of Goods Manufactured.)

Group of answer choices

$795,000

$845,000

$855,000

$1,395,000