Osborn Manufacturing uses a predetermined overhead rate of $19.00 per direct labor-hour. This predetermined rate was based on acost formula that estimates $243,200 of total manufacturing overhead for an estimated activity level of 12,800 direct labor-hours.The company actually incurred $241,000 of manufacturing overhead and 12,300 direct labor-hours during the period.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 todispose of the underapplied or overapplied overhead increase or decrease the company's gross margin? By how much?

Applied overhead = $19.00 x 12,300 = $233,700

Answered: Osborn Manufacturing uses a…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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