Part 1)
Manufacturing overheads underapplied/(overapplied)
= actual overheads- overheads applied
= 221000 - (11800×18.5)
= 221000 - 218300
= $ 2700 underapplied
Thus final answer
Manufacturing overheads underapplied by $2700
Part 2)
If under applied overheads are closed to cost of goods sold gross margin will decrease by $ 2700
This the correct answer is
The gross margin would decrease by $ 2700
Osborn Manufacturing uses a predetermined overhead rate of $18.50 per direct labor-hour. This predetermined rate was...
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