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Novak makes and sells milkshakes in individual-sized serving containers. Its most popular flavors are strawberry, caramel, chocolate, and vanilla. Due to its automated processes, it uses machine hours as its cost driver, and the company determines a budgeted MOH rate at the beginning of the year. This year's rate is estimated at $1.25/machine hour. The following events occurred this year (amounts are in thousands). 1. Purchased milk, sugar, flavorings, and other ingredients ($431 direct/$41 indirect) $472 2. Transferred direct materials into production 521 3. Incurred direct labor cost for factory workers 386 4. Transferred indirect materials into production 53 5. Incurred salary for factory supervisors 146 6. Received utility bill for factory 29 7. Incurred labor cost for maintenance employees in factory 66 8. Applied MOH based on 276,000 actual machine hours used ? 9. Recorded cost of goods completed 1.381 10. Recognized revenue for milkshakes sold on account 2.648 11. Recognized Cost of Goods Sold associated with units sold 1,556 The following balances existed in these accounts at the beginning of the year. RM Inventory $322 ($241 direct materials, $81 indirect materials) WIP Inventory 411 FG Inventory 261 (a) Does Novak utilize an actual costing system or a normal costing system? The company uses a |costing system