ACCOUNT 249 Intro to Managerial Accounting Chapter 3 Canvas Homework - SHOW YOUR WORK FOR CREDIT Underapplied and Overapplied Overhead Oz Manufacturing uses a predetermined overhead rate of $20.10 per direct labor-hour. This predetermined rate was based on a cost formula that estimates $279,390 of total manufacturing overhead for an estimated activity level of 13,900 direct labor-hours. The company actually incurred $277,000 of manufacturing overhead and 13,400 direct labor-hours during the period. Required: 1. Determine the amount of underapplied or overapplied manufacturing overhead for the period. Please circle or highlight & fill in the amount Overapplied Underapplied $ 2. Assume that the company's underapplied or overapplied overhead is closed to Cost of Goods Sold. Would the journal entry to dispose of the underapplied or overapplied overhead increase or decrease the company's gross margin? By how much? Please circle or highlight & fill in the amount Gross margin would increase decrease by $ Schedules of Cost of Goods Manufactured and Cost of Goods Sold; Income Statement Superior Company provided the following data for the year ended December 31 (all raw materials are used in production as direct materials): Selling expenses $216,000 Purchases of raw materials $261,000 Direct labor ? Administrative expenses $157,000 Manufacturing overhead applied to work in process$373,000 Actual manufacturing overhead cost $358,000 Inventory balances at the beginning and end of the year were as follows: Beginning Ending Raw materials $ 55,000 $30,000 Work in process ? $25,000 Finished goods $ 36,000 ? The total manufacturing costs added to production for the year were $675,000; the cost of goods available for sale totaled $720,000; the unadjusted cost of goods sold totaled $661,000; and the net operating income was $32,000. The company's underapplied or overapplied overhead is closed to Cost of Goods Sold Required: Prepare schedules of cost of goods manufactured and cost of goods sold and an income statement. (Hint: Prepare the income statement and schedule of cost of goods sold first followed by the schedule of cost of goods manufactured.) Superior Company Income Statement Superior Company Schedule of Cost of Goods sold Superior Company Schedule of Cost of Goods Manufactured