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 $4,910,400, and the practical level of activity is 372,000 machine hours. During the year, Craig used 379,000 machine hours and incurred actual overhead costs of $4,922,800. Craig also had the following balances of applied overhead in its accounts: Work-in-process inventory $620,800
Finished goods inventory 627,200
Cost of goods sold 1,952,000

Required:

a. Compute a predetermined overhead rate for Craig. Round your answer to the nearest cent.
b. Compute the overhead variance, and label it as under- or overapplied.
c. Assuming the overhead variance is immaterial, prepare the journal entry to dispose of the variance at the end of the year.
d. Assuming the overhead variance is material, prepare the journal entry that appropriately disposes of the overhead variance at the end of the year.

The gilbert instrument corporation is considering replacing the wood steamer it currently uses to shape guitar sides. the steamer has 6 years of remaining life. if kept,the steamer will have depreciaiton expenses of $650 for five years and $325 for the sixthyear. its current book value is $3,575, and it can be sold on an internet auction site for$4,150 at this time. if the old steamer is not replaced, it can be sold for $800 at the endof its useful life. gilbert is considering purchasing the side steamer 3000, a higher-end steamer, whichcosts $12,000 and has an estimated useful life of 6 years with an estimated salvage value of$1,500. this steamer falls into the macrs 5-year class, so the applicable depreciationrates are 20.00%, 32.00%, 19.20%, 11.52%, 11.52%, and 5.76%. the new steamer is fasterand allows for an output expansion, so sales would rise by $2,000 per year; the newmachine's much greater efficiency would reduce operating expenses by $1,900 per year.to support the greater sales, the new machine would require that inventories increase by$2,900, but accounts payable would simultaneously increase by $700. gilbert's marginalfederal-plus-state tax rate is 40%, and its wacc is 15%.a. should it replace the old steamer? b. npv of replace = $2,083.51