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and Luzadis Company makes furniture using the latest automated technology. The company uses a job-order costing system and applies manufacturing overhead cost to products on the basis of machine-hours. The predetermined overhead rate was based on a cost formula that estimates $900,000 of total manufacturing overhead for an estimated activity level of 75,000 machine-hours. total manufacturing overhea oours The predetermined During the year, a large quantity of furniture on the market resulted in cutting back production and a buildup of furniture in the company's warehouse. The company's cost records revealed the following actual cost and operating data for the year: Machine-hours Manufacturing overhead cost Inventories at year-end: 60,000 850,000 Raw materials Work in process (includes overhead applied of $36,000) Finished goods (includes overhead applied of $180,000) $ 30,000 $ 100,000 $ 500,000 1,400,000 Cost of goods sold (includes overhead applied of $504,000)