Question 3 Needs Grading Old World Clocks, Inc., which uses a job-costing system, began business on January 1, 2018 and applies manufacturing overhead on the basis of direct-labor cost. The following information relates to 2020: Budgeted direct labor and manufacturing overhead were anticipated to be $660,000 and $825,000 respectively. Job no. I was started in 2019 and had $37,000 of cost in work in process as of 12/31/19. Jobs 2 and 3 were begun during the year and had the following charges for direct material and direct labor: Job No. Direct Materials Direct Labor $ 148,000 $ 55,000 2 234,000 64,000 3 86,000 98,000 1 Job nos. 1 and 2 were completed and sold on account to customers at full product cost plus 140%. Job no. 3 remained in production. Actual manufacturing overhead by year-end totaled $280,000. Required: A. Compute the company's predetermined overhead application rate. 4 points B. What is the full product cost of Jobs 1 and 2? 12 points C. Compute Old World Clock's ending work-in-process inventory. 6 points D. Determine Old World Clock's gross margin. 4 points E. Was manufacturing overhead under- or overapplied during 2020? By how much? 3 points