Prepare a revised 20X7 actual income statement. Applied manufacturing overhead rate is $113.75/direct labor hour and overhead is over-applied by $41861. It is the companys policy to write off any total over- or underapplied overhead to the total cost of goods sold rather than individual products during the period in which it is incurred. The amounts for all three products is as follows: For the choc bar: beginning inventory $17,561, ending inventory is $18,292, sales were $1164000, GOGS were $945595 and gross margin % was 18.8%. For the alamonde: beginning inventory was $10,702, ending inventory $10,497, sales were $897,600, COGS $724672 and gross margin % 19.3%. Lastly, for the salt bar Beginning inventory and ending inventory was $0, sales were $605000, COGS $448187 and gross margin % of 25.9. The actual total sales for the year reported on the income statement were $2666600, Cost of goods Sold $2118454 and gross margin % was 20.6%.

Comment on the change in gross margin overall, and for each product individually, as a result of the changes applied.