Waterway Industries reported the following year-end information: Beginning work in process inventory $1080000 Beginning raw materials inventory 300000 Ending work in process inventory 900000 Ending raw materials inventory 480000 Raw materials purchased 1200000 Direct labor 1060000 Manufacturing overhead 780000 Waterway Industries's cost of goods manufactured for the year is 1. $3220000. 2. $2860000. 3. $2680000. 4. $3040000.

The correct answer is option (D).

Explanation:

According to the scenario, the given data are as follows:

Beginning work = $1,080,000

Beginning raw materials = 300,000

Ending work = 900,000

Ending raw materials = 480,000

Raw materials purchased = 1,200,000

Direct labor = 1,060,000

Manufacturing overhead 780,000

First we calculate direct material used,

Direct material used = 300,000 + 1,200,000 - 480,000

= 1,020,000

So, we can calculate the cost of goods manufactured by using following formula:

Cost of Goods Manufactured = Direct Material Used + Direct Labor + Manufacturing Overhead + Opening Work - Closing Work

= 1,020,000 + 1,060,000 + 780,000 + 1,080,000 - 900,000

= $3,040,000

Hence, the cost of goods manufactured is $3,040,000.