ercise 4.13 Predetermined Overhead Rate, Overhead Variances, Journal Entries Company uses a predetermined overhead rate to assign overhead to jobs. Because Craigs Craig uction is machine intensive, overhead is applied on the basis of machine hours. The machine hours. expected overhead for the year was S5.7 million, and the practical level of activity is 375,000 ma During 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: Work-in-process inventory Finished goods inventory Cost of goods sold $ 576,000 624,000 1,800,000 Required: 1. Compute a predetermined overhead rate for Craig. 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. 4. Assuming the overhead vari ance is material, prepare the journal entry that appropriately disposes of the overhead variance at the end of the year