Fossil Manufacturing uses a predetermined overhead rate of $$19\mathrm{.}50$ per direct labor$-$hour. This predetermined rate was based on

$12,700$ estimated direct$-$labor$-$hours and $$247,650$ of estimated total manufacturing overhead. The company incurred actual

manufacturing overhead costs of $$245,000$ and $12,200$ direct labor$-$hours.

Required:

a$.$ Determine the amount of underapplied or overapplied manufacturing overhead for the period.

b$.$ Assuming that the company closed manufacturing overhead to cost of goods sold, make the journal entry to close manufacturing

overhead.

c$.$ What is the effect of this entry on the company's gross margin?