LO1 Menotti Company uses a predetermined overhead rate to assign overhead to jobs. Be- cause Menotti's production is machine intensive, overhead is applied on the basis of machine hours. The expected overhead for the year was $3.8 million, and the practical level of activity is 250,000 machine hours. During the year, Menotti used 255,000 machine hours and incurred actual over- head costs of $3.82 million. Menotti also had the following balances of appliced over- head in its accounts: Work-in-Process Inventory Finished Goods Inventory S 384,000 416,000 1,200,000 Cost of Goods Sold Required: 1. Compute a predetermined overhead rate for Menotti. 2. Compute the overhead variance, and label it as under- or overapplied. 3. Assuming the overhead variance is immaterial, prepare the journal entry to dis- pose of the variance at the end of the year. 4. Assuming the overhead variance is material, prepare the journal entry that appro- priately disposes of the overhead variance at the end of the year.