Savallas Company is highly automated and uses computers to control manufacturing operations. The company uses a job-orde

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Savallas Company is highly automated and uses computers tocontrol manufacturing operations. The company uses a job-ordercosting system and applies manufacturing overhead cost to productson the basis of computer-hours. The following estimates were usedin preparing the predetermined overhead rate at the beginning ofthe year:
Computer hours 85,000
Manufacturing overheadcost $1, 530, 000
During the year, a severe economic recession resulted in cuttingback production and a buildup of inventory in the company'swarehouse. The company's cost records revealed the following actualcost and operating data for the year:
Computerhours 60,000
Manufacturing overheadcost $1,350,000
Inventories at the end
Rawmaterials $400,000
Work inprogress $160,000
Finishedgoods $1,040,000
Cost of goodssold $2,800,000
Required: