Christopher's Custom Cabinet Company uses a job order cost system with overhead applied as a percentage of direct labor costs. Inventory balances at the beginning of 2016 follow: Raw Materials Inventory Work in Process Inventory Finished Goods Inventory $16,900 5,600 20,700 The following transactions occurred during January: (a) Purchased materials on account for $26,000 (b) Issued materials to production totaling $21,400, 90 percent of which was traced to specific jobs and the remainder of which was treated as indirect materials (c) Payroll costs totaling $17,500 were recorded as follows $12,000 for assembly workers 1,200 for factory supervision 2,700 for administrative personnel 1,600 for sales commissions (d) Recorded depreciation: $4,600 for machines, $700 for the copier used in the administrative office (e) Recorded $1,700 of expired insurance. Forty percent was insurance on the manufacturing facility, with the remainder classified as an administrative expense (f) Paid $4,800 in other factory costs in cash. g) Applied manufacturing overhead at a rate of 200 percent of direct labor cost. (h) Completed all jobs but one; the job cost sheet for this job shows $2,500 for direct materials, $2,400 for direct labor, and $4,800 for applied overhead (i) Sold jobs costing $51,200. The revenue earned on these jobs was $66,560 2. Determine how much gross profit the company would report during the month of January before any adjustment is made for the overhead balance Gross Profit 3. Determine the amount of over- or underapplied overhead. 4. Compute adjusted gross profit assuming that any over- or underapplied overhead balance is adjusted directly to Cost of Goods Sold Gross Profit