EXERCISE 3-3 Schedules of Cost of Goods Manufactured and Cost of Goods Sold LO3-3 Primare Corporation has provided the following data conceming last month's manufacturing operations Purchases of raw materials Indirect materials included in manufacturing overhead Direct labor Manufacturing overhead applied to work in process Underapplied overhead $30,000 $5,000 $58,000 $87,000 $4,000 Beginning Ending $12,000 $18,000 $56,000 $65,000 $35,000 $42,000 Raw materials Work in process Job-Order Costing: Cost Flows and External Reporting 135 Required . Prepare a schedule of cost of goods manufactured for the month. 2. Prepare a schedule of cost of goods sold for the month. Assume the underapplied or overap- plied overhead is closed to Cost of Goods Sold. EXERCISE 3-4 Underapplied and Overapplied Overhead LO3-4 Osborn Manufacturing uses a predetermined overhead rate of S18.20 per direct labor-hour. This predetermined rate was based on a cost formula that estimates $218,400 of total manufacturing overhead for an estimated activity level of 12,000 direct labor-hours. The company actually incurred $215,000 of manufacturing overhead and 11,500 direct labor- hours during the period. Required . Determine the amount of underapplied or overapplied manufacturing overhead for the period. 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? 2