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 $5,820,000, and the practical level of activity is 388,000 machine hours. During the year, Craig used 394,500 machine hours and incurred actual overhead costs of $5,833,500. Craig also had the following balances of applied overhead in its accounts: Work-in-Drocess inventory Finished goods inventory Cost of goods sold $ 586,245 504,900 1,713,855 4. Assuming the overhead variance is material, prepare the journal entry that appropriately dispose of the overhead variance at the end of the year. If an amount box does not require an entry, leave it blank. Overhead control 84.000 Work-in-process inventory 16,128 Finished goods inventory Cost of goods sold