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 following estimates were used in preparing the predetermined overhead rate at the beginning of the year:

Machine-hours		88,000
Fixed manufacturing overhead cost	$	1,275,000
Variable manufacturing overhead per computer-hour	$	3.70

During the year, a glut of furniture on the market resulted in cutting back production and a buildup of furniture in the company