Cook builders manufactures custom furniture only and uses a job order costing system to accumulate costs. actual direct materials and direct labor costs are accumulated for each job, but a predetermined overhead rate is used to apply manufacturing overhead costs to individual jobs. manufacturing overhead is applied on the basis of direct labor hours. in computing a predetermined overhead rate, the controller estimate that manufacturing overhead costs for the year would be $200,000 and direct labor hours would be 20,000. the following summary information is available for the year.
raw materials purchased during the year were $275,000.
raw materials used in production during the year were $250,000.
wages paid to the furniture craftsmen during the year totaled $440,000 (22,000 hours).
wages paid to factory maintenance workers during the year totaled $60,000.
depreciation on machinery and equipment during the year totaled $90,000.
rent and utilities for the factory building during the year totaled $45,000.
manufacturing overhead was applied to work-in-process inventory using the predetermined overhead rate.
work-in-process inventory costing $850,000 was completed and transferred to finished goods inventory.
goods costing $800,000 were sold.
assume that the beginning balance in the finished goods inventory account was $0. what is the ending balance of the finished goods inventory account?
a. $800,000
b. $25,000
c. $50,000
d. $75,000
e. $850,000