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Operating data for the Abraham Company for fiscal 2017 are presented below. Abraham has one building, and the space in the building is divided about equally between manufacturing and retailing. Approximately 20% of the labor costs incurred in manufacturing are for supervisory labor, and the remaining 80% of the salaries are paid to employees directly engaged in manufacturing jobs for clients.

Purchases of raw material in 2017 $220,000

Manufacturing labor cost incurred $500,000

Salaries of sales force $112,000

Operating expenses for the building $90,000

Vacation pay and employee benefits for factory workers $74,000

Retail selling and administrative expenses $282,000

Depreciation expense for delivery trucks $25,000

Safety training for production workers $16,000

Depreciation of factory equipment $110,000

Raw materials inventory, 12/31/16 $42,000

Raw materials inventory, 12/31/17 $36,000

Work in progress inventory, 12/31/16 $18,000

Work in progress inventory, 12/31/17 $20,000

Finished goods inventory, 12/31/16 $44,000

Finished goods inventory, 12/31/17 $50,000

Applied manufacturing overhead in 2017 $300,000

Sales revenue $1,600,000

Setting aside your answer to the question on Abraham's manufacturing overhead, assume that the actual cost of overhead is $280,000, the applied manufacturing overhead in 2017 is $300,000 (as originally stated in the problem), and the cost of goods sold before considering the amount of overapplied or underapplied overhead is $900,000. Compute the cost of goods sold for 2017 after adjusting for the overapplied/underapplied overhead (do not prorate). Show your work and/or explain your answer in order to receive full credit.

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