Acela Partners uses absorption costing based on standard costs and reports the following data for 2007:

Theoretical capacity 360 000 units

Practical capacity 300 000 units

Normal capacity utilisation 240 000 units

Selling price R30 per unit

Beginning inventory 25 000 units

Production 260 000 units

Sales volume 280 000 units

Variable budgeted manufacturing cost R3 per unit

Total budgeted fixed manufacturing costs R3 600 000

Total budgeted operating costs (all fixed) R1 000 000

The production-volume variance is written off to cost of sales. For each choice the denominator level, the budgeted production cost per unit is also the cost per unit of beginning inventory.

Required:

1.1 Calculate the production-volume variance in 2007and indicate its effect on COGS when the denominator level is:

a. Theoretical capacity

b. Practical capacity

c. Normal capacity utilisation