Company company applies overhead to jobs using a predetermined overhead rate based on machine-hours. At the beginning of the year, the company estimated that it would have 15,000 machine-hours and incur $500,000 in manufacturing overhead cost. The following transactions were recorded for the month of January:

• Raw materials purchased: $60,000.
• Raw materials used in production: $28,000 direct
• Direct labor: $70,000
• Marketing expenses were $3,500
• Depreciation on the manufacturing facilities was $5,000
• The actual number of machine-hours used during the month was 1,700 hours.
• The company made 40,000 units and sold 30,000 for a retail price of $4 per unit

1. How much applied overhead does the Company record for January? (show your work)

2. What is the Company's gross profit amount for January? WIP has a beginning balance of $0 and ending balance of $0.