Craig Company uses a predetermined overhead rate to assign overhead to jobs. Because Craig's production is machine intensive, overhead is applied on the basis of machine hours. The expected overhead for the year was $4,699,800, and the practical level of activity is 373,000 machine hours. During the year, Craig used 380,500 machine hours and incurred actual overhead costs of $4,717,300. Craig also had the following balances of applied overhead in its accounts: Work-in-process inventory Finished goods inventory Cost of goods sold Required: $ 601,965 665,665 1,917,370 1. Compute a predetermined overhead rate for Craig. Round your answer to the nearest cent. per machine hour 2. Compute the overhead variance, and label it as under- or overapplied. 3. Assuming the overhead variance is immaterial, prepare the journal entry to dispose of the variance at the end of the year.