The following information was taken from Cody Co.'s accounting records for the year ended December 31, 2005: Decrease in raw materials inventory $ 15,000 Increase in finished goods inventory 35,000 Raw materials purchased 430,000 Direct labor payroll 200,000 Factory overhead 300,000 Freight-out 45,000 There was no work-in-process inventory at the beginning or end of the year. Cody's 2005 cost of goods sold is.

$910,000

Explanation:

The computation of the cost of goods sold is shown below:

= Total manufacturing cost -  Increase in finished goods inventory

where,

Total manufacturing cost is

= Direct material used + Direct labor payroll cost + factory Overhead cost

= $445,000 + $200,000 + $300,000

= $945,000

The direct material used is

= Raw materials purchased + Decrease in raw materials inventory

= $430,000 + $15,000

= $445,000

Now the cost of goods sold is

= $945,000 - $35,000    

= $910,000

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