1 (2.5 points) Let's Go Green (LGG) Company produces energy-efficient light bulbs. LGG evaluates its financial performance using absorption costing based on standard costs Any variances are closed out directly to COGS. The standard variable cost of production is $3/bulb. Fixed manufacturing overhead costs are budgeted at $1,200,000 per year. Variable selling and admin. costs are $0.50/bulb sold. Fixed selling and admin. costs are $250,000 per year. Because its light bulbs are popular with environmentally-conscious customers, the bulbs sell for $12 each. LGG has not decided which denominator level to use in setting its budgeted fixed overhead rate per unit. The following annual levels have been distinguished: Theoretical Capacity Practical Capacity Normal Capacity 600,000 bulbs 400,000 bulbs 300,000 bulbs Under which denominator level(s) would LGG report a favorable production volume variance? Practical and Normal capacity levels Theoretical capacity level only Theoretical and Practical capacity levels Normal capacity level only