Exerclse $3\mathrm{.}4($Algo$)$ Underapplled and Overapplled Overhead $[$LO$3-4]$

Osborn Manufocturing uses a predetermined overhesd rate of $$19\mathrm{.}10$ per direct labor$-$hour. This predetermined rate wos bosed on a

cost formula that estimates $$246,390$ of total monufacturing overhesd for an estimated activity level of $12,900$ direct labor$-$hours.

The company actuslly incurred $$245,000$ of manufacturing overhead and $12,400$ direct labor$-$hours during the period.

Required:

Colculate the underopplied or overopplied manufacturing overhead.

$2$ Assume the compony's underopplied or overopplied overhead is closed to Cost of Goods Sold. Would the closing journal entry

increase or decreose gross margin? By how much?