Question
PLEASE INCLUDE CALCULATIONS Raytheon Manufacturing uses a predetermined overhead rate of $19.60 per direct labor-hour. This predetermined rate was based on a cost formula that
PLEASE INCLUDE CALCULATIONS
Raytheon Manufacturing uses a predetermined overhead rate of $19.60 per direct labor-hour. This predetermined rate was based on a cost formula that estimates $262,640 of total manufacturing overhead for an estimated activity level of 13,400 direct labor-hours.
The company actually incurred $255,000 of manufacturing overhead and 12,900 direct labor-hours during the period.
1. Amount of underapplied or overapplied manufacturing overhead for the period?
2. If company's underapplied or overapplied overhead is closed to Cost of Goods Sold. the journal entry to dispose of the underapplied or overapplied overhead increase or decrease the company's gross margin?By how much?
Manufacturing overhead underapplied by: __________
The gross margin would decrease by: __________
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