Exercise 4.13 Predetermined Overhead Rate, Overhead Variances, Journal EntriesOBJECraig Company uses a predetermined overhead rate to assign overhead to jobs. Because Craig'sproduction is machine intensive, overhead is applied on the basis of machine hours. Theexpected overhead for the year was $5.7 million, and the practical level of activity is 375,000machine hours.During the year, Craig used 382,500 machine hours and incurred actual overhead costs of$5.73 million. Craig also had the following balances of applied overhead in its accounts:$ 576,000Work-in-process inventoryFinished goods inventoryCost of goods sold624,0001,800,000Required: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 thevariance at the end of the year.4. Assuming the overhead variance is material, prepare the journal entry that appropriatelydisposes of the overhead variance at the end of the year.Exercise 4.14 Departmental Overhead RatesOBJECMariposa, Inc., produces machine tools and currently uses a plantwide overhead rate, based onmachine hours. Harry Whipple, the plant manager, has heard that departmental overhead rates.can offer significantly better cost assignments than can a plantwide rate.Mariposa has the following data for its two departments for the coming year:Department ADepartment B

Name: Exercise 4.13 Predetermined Overhead Rate, Overhead Variances, Journa
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Description: Exercise 4.13 Predetermined Overhead Rate, Overhead Variances, Journal EntriesOBJECraig Company uses a predetermined overhead rate to assign overhead to jobs. Because Craig'sproduction is machine intensive, overhead is applied on the basis of machin