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9.3 - SuperLager has just purchased the Austin Brewery. The brewery is 2 years old and uses absorption costing. It will sell its product to
9.3 - SuperLager has just purchased the Austin Brewery. The brewery is 2 years old and uses absorption costing. It will "sell" its product to Super Lager at $47 per barrel. Peter Bryant, Super Lager's controller, obtains the following information about Austin Brewery's capacity and budgeted fixed manufacturing costs for 2020:
Super Lager has just purchased the Austin Brewery. The brewery is 2 years old and uses absorption costing. It will "sell" its product to Super Lager at $47 per barrel. Peter Bryant, Super Lager's controller, obtains the following information about Austin Brewery's capacity and budgeted fixed manufacturing costs for 2020: (Click the icon to view the information.) Read the requirements. Requirement 1. Compute the budgeted fixed manufacturing overhead rate per barrel for each of the denominator-level capacity concepts. Explain why they are different. Begin by determing the formula to calculate the budgeted fixed manufacturing overhead rate per barrel, then compute the rate for each of the denominator-level capacity concepts. (Abbreviations used: Budg. = budgeted, MOH= manufacturing overhead. Round the rates to the nearest cent.) Budgeted fixed 1=MOH rate per barrel Data table Requirements 1. Compute the budgeted fixed manufacturing overhead rate per barrel for each of the denominator-level capacity concepts. Explain why they are different. 2. In 2020 , the Austin Brewery reported these production results: There are no variable cost variances. Fixed manufacturing overhead cost variances are written off to cost of goods sold in the period in which they occur. Compute the Austin Brewery's operating income when the denominator-level capacity is (a) theoretical capacity, (b) practical capacity, and (c) normal capacity utilization
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