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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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