Brewer, Intr

Osborn Manufacturing uses a predetermined overhead rate of $19.70 per direct labor-hour. This predetermined rate was based on a cost formula that estimates $265,950 of total manufacturing overhead for an estimated activity evel of 13,500 direct labor-hours. The company actually incurred $260,000 of manufacturing overhead and 13,000 direct labor- hours during the period. Required: 1. Determine the amount of underapplied or overapplied 2. Assume that the company's u dispose of the underapplied or overapplied ov manufacturing overhead for the period nderapplied or overapplied overhead is closed to Cost of Goods Sold. Would the journal entry to the company's gross margin? By how much? of goods manufactured. Assume all raw materials used in production were direct materials. of C