ABC Manufacturing is a small manufacturer that uses machine hours as its activity base for the assignment of overhead costs to jobs.

The company estimated the following amounts for the current year and for Job 62.

Instructions

A. How much is predetermined overhead rate?

B. How much are the total manufacturing costs of Job 62?

C. How much overhead is over- or under-applied for the year?

D. What is the gross profit when $15,000 equals the total proceeds from the sale of Job 62?

\begin{tabular}{|l|r|r|} \hline & Company & Job 62 \\ \hline Direct Materials & $60,000 & $4,000 \\ \hline Direct Labour & $25,000 & $2,500 \\ \hline Manufacturing Overhead & $54,000 & \\ \hline Machine Hours & 90,000 & 1,350 \\ \hline & & \\ \hline During the Year: & & \\ \hline 94,000 Actual Machine Hours & & \\ \hline \$54,000 Actual Overhead Costs & & \\ \hline \end{tabular}