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3. Campbell Inc. is a small manufacturer that uses machine-hours as its activity base for assigning overhead costs to jobs. The company estimated the following amounts for 2013 for the company and for Job 62:
Company Job 62
Job 62
Direct materials $60,000 $4,500
Direct labor $25,000 $2,500
Manufacturing overhead costs $72,000
Machine hours 80,000 1,350

During 2013, the actual machine-hours totaled 84,000, and actual overhead costs were $71,000.

(a) Compute the predetermined overhead rate.
(b) Compute the total manufacturing costs for Job 62.
(c) How much overhead is over or under applied for the year for the company? State the dollar amount and whether it is over- or under applied.
(d) If Campbell Inc. sells Job 62 for $14,000, compute the gross profit.


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