eBook Calculator Predetermined Overhead Rate, Overhead Variances, Journal Entries 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 $5,515,200, and the practical level of activity is 383,000 machine hours. During the year, Craig used 390,500 machine hours and incurred actual overhead costs of $5,553,200. Craig also had the following balances of applied overhead in its accounts: Work-in-process inventory $ 622,200 Finished goods inventory 622,200 Cost of goods sold 1,805,600 Required: