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Adriana Company is highly automated and uses computers to control manufacturing operations. The company uses a job-order costing system and applies manufacturing overhead cost to
Adriana Company is highly automated and uses computers to control manufacturing operations. The company uses a job-order costing system and applies manufacturing overhead cost to products on the basis of computer-hours. The following estimates were used in preparing the predetermined overhead rate at the beginning of the year: |
Computer-hours | 82,000 | |
Fixed manufacturing overhead cost | $ | 1,278,000 |
Variable manufacturing overhead per computer-hour | $ | 3.40 |
During the year, a severe economic recession resulted in cutting back production and a buildup of inventory in the company |
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