Question

ps M ouTube OL ch3-16 Help Save & Exit Submi Check my work Osbom Manufacturing uses a predetermined overhead rate of $19.00 per direct labor-hour This predetermined rate was based on a cost formula that estimates $243,200 of total manufacturing overhead for an estimated activity level of 12.800 direct labor hours The company actually incurred 5241000 of manufacturing overhead and 12,300 direct labor hours during the period DO Required: 1. Determine the amount of underapplied or overapplied manufacturing overhead for the period 2. Assume that the company's underapplied or overapped overhead is closed to cost of Goods Sold Would the journal entry to dispose of the underapplied or overapplied overhead increase or decrease the con ross margin? By how much? 1 Manufacturing overhead 12 The gross me

Answer 1

1 calculatiom f_ Applied Manufacturing Overhead I fredebes mimeteed Actual direct - Overhead role Labor hour $19 X 2300 - $ 233.700 calculation Over/ under Applied Overhead =) Applied Manufacturing — Acheel Manufacturing Overhead Not Overhead 233700 - 241,000 min - $ 7.300 Umdes abblied - 0 2. Journal Emley]:- for under abplied O vechead love closed to cost of Goods sold cost a Goods Sold $7300 Mamyfacturing - Overhead 87300 Simu Oveshead is undesapplied, less Overhead has beam abplied to lovembocy. from above entley Cost of goods sold is imcuand, so Gross Profit Margin would decrease by8 7300

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