Solution-Would journal entry to dispose of underapplied or

Would journal entry to dispose of underapplied or overapply

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Reference no: EM132659997

Osborn Manufacturing uses a predetermined overhead rate of $19.20 per direct labor-hour. This predetermined rate was based on a cost formula that estimates $249,600 of total manufacturing overhead for an estimated activity level of 13,000 direct labor- hours. The company actually incurred $247,000 of manufacturing overhead and 12,500 direct labor-hours during the period.

Required:

Problem 1. Determine the amount of underapplied or overapplied manufacturing overhead for the period.

Problem 2. Assume that the company's underapplied or overapplied overhead is closed to Cost of Goods Sold. Would the journal entry to dispose of the underapplied or overapplied overhead increase or decrease the company's gross margin? By how much?

Reference no: EM132659997

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Would journal entry to dispose of underapplied or overapply

Reference no: EM132659997

Reference no: EM132659997

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