1 Was overhead over- or underapplied for each company, and by holW Huen Exercise 4.13 Predetermined Overhead Rate, Overhead Variances, Journal Entries aig Company uses a predetermined overhead rate to assign overhead to jobs. Because Craig's daction is machine intensive, overhead is applied on the basis of machine hours. The spcted overhead for the year was $5.7 million, and the practical level of activity is 375,000 achine hours. OBJECTI Dunng the year, Craig used 382,500 machine hours and incurred actual overhead costs of 5 73 million. Craig also had the following balances of applied overhead in its accounts: S 576,000 624,000 1,800,000 Work-in-process inventory Finished goods inventory Cost of goods sold Required: Compute a predetermined overhead rate for Craig. 2 Compute overhead variance, and label it as under- or overapplied. 1Assuming the overhead variance is immaterial, prepare the journal entry to dispose of the variance at the end of the year. Asuming the overhead variance is material, prepare the journal entry that appropriately disposes of the overhead variance at the end of the year. OBJECT LOverhead Rates plantwide overhead rate, based on