Managerial Accounting homework?

Posted on 2014-04-23 11:18:00 in Economics by CHEMISTRY CLASS IS

Im trying to figure out how to do two hw problems but I am stuck. Here is the description/ 2 Qs:





Quill Manufacturing uses a predetermined overhead rate of $22.20 per direct labor-hour. This predetermined rate was based on 8,090 estimated direct labor-hours and $179,598 of estimated total manufacturing overhead.

The company incurred actual total manufacturing overhead costs of $178,300 and 8,260 total direct labor-hours during the period.



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

Manufacturing overhead "overapplied" $ ___________?



2) Assuming that the entire amount of the underapplied or overapplied overhead is closed out to Cost of Goods Sold, what would be the effect of the underapplied or overapplied overhead on the company's gross margin for the period?

The gross margin would "increase" by $ ___________?



For #1, I thought I would just have to get the ESTIMATED total manufacturing overhead ($179,598) and SUBTRACT it from the ACTUAL total manufacturing overhead ($178,300). But I continue to get an error when entering my answer of ($1,298). Please help, thanks.



As for #2, I don't even know where to start.

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