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 $6,364,000, and the practical level of activity is 370,000 machine hours During the year, Craig used 376,000 machine hours and incurred actual overhead costs of $6,391,200. Craig also had the following balances of applied overhead in its accounts: Work-in-process inventory Finished goods inventory Cost of goods sold Required $ 543,375 560,625 1,771,000 1. Compute a predetermined overhead rate for Craig. Round your answer to the nearest cent. 17.2 per machine hour 2. Compute the overhead variance, and label it as under- or overapplied 6,467,20X overapplied