Luzadis Company makes furniture using the latest automated technology. The company uses a job-order costing system and applies manufacturing overhead cost to products based on 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. During the year, a large quantity of furniture on the market caused Luzadis to cut production and build inventories. The company provided the following data for the year: Machine-hours 60,000 Manufacturing overhead cost $ 850,000 Inventories at year-end: Raw materials $ 30,000 Work in process (includes overhead applied of $36,000) $ 100,000 Finished goods (includes overhead applied of $180,000) $