Osborn manufacuting uses a pre det overhead rate of $20.20 direct labor hours. Bases on Cost formula that estimates $282,800 of total manf overhead for estimated activity level of 14,000 direct labor hours. The company actually incurred 279,000 of manf overhead and 13,500 of direct labor hours during the period.

1.Determine the amount of under-applied or over-applied manuf overhead for the period.

2. Assume that the company's under or over applied is closed to Cost of Goods Sold. Would the journal entry to dispose of the under or over applied increase or decrease the company's gross margin?

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