excercise 4.13

red overhead Ciliead of $915,000 Uuls and of and had produced $972.000 and had produced 61,500 units using 32,650 machine hours and materials costing $445,000. Lemon Company had materials costing S1,777,500 Required: l. Compute the predetermined overhead rates for Findley Company and Lemon Company. overhead over- or underapplied for each company, and by how much ise 4.13 Predetermined Overhead Rate, Overhead Variances, Journal Entries Craig Company uses a predetermined overhead rate to assign overhead to jobs. Because Craig's expected overhead for the year was $5.7 million, and the practical level of activity is 375,000 During the year, Craig used 382,500 machine hours and incurred actual overhead costs of Exerc uction is machine intensive, overhead is applied on the basis of machine hours. The machine hours. s5.73 million. Craig also had the following balances of applied overhead in its accounts Work-in-process inventory Finished goods inventory Cost of goods sold S 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 variance is material, prepare the journal entry that appropriately disposes of the overhead variance at the end of the year. Exercise 4.14 Departmental Overhead Rates OBJECTIV Marinosa In hine tools and currently uses a plantwide overhead rate, based on