2 Osborn Manufacturing uses a predetermined overhead rate of $18.30 per direct l

Question

2 Osborn Manufacturing uses a predetermined overhead rate of $18.30 per direct labor-hour. This predetermined rate was based on a cost formula that estimates $221,430 of total manufacturing overhead for an estimated activity level of 12,100 direct labor-hours The company actually incurred $217,000 of manufacturing overhead and 11.600 direct labor-hours during the period. 2.08 points Required: 1. Determine the amount of underapplied or overapplied manufacturing overhead for the period. 2. Assume that the company's underapplied or overapplied overhead is closed to Cost of Goods Sold. Would the journal entry to ebook dispose of the underapplied or overapplied overhead increase or decrease the company's gross margin? By how much? References by by 2 The gross margin would

Explanation / Answer

Actual manufacturing overhead 217,000 Applied manufacturing overhead (18.30*11600)= 212280 MOH under applied 4,720 1 Manufacturing overhead under applied by 4,720 2 the gross margin would decrease by 4,720

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