Cole Corporation is a manufacturer of computer accessories. It uses absorption costing based on standard costs and reports the following data for the year. (Click the icon to view the data.) There are no rate or efficiency variances. Actual operating costs equal budgeted operating costs. The production-volume variance is written off to COGS. For each choice of denominator level, the budgeted production cost per unit is also the cost per unit of beginning inventory. Required Requirement 1. What is the production-volume variance for the year when the denominator level is (a) theoretical capacity, (b) practical capacity, and (c) normal capacity utilization? Begin by determining the formula that is used to calculate the production-volume variance. (Abbreviation used: mfg = manufacturing.) Production- =volume variance Data table ba - Theoretical capacity 240,000 units ng duc Practical capacity 220,000 units Normal capacity utilization 176,000 units Selling price 45 per unit Beginning inventory 35,000 units Production 205,000 units ator Sales volume 215,000 units ce. (A Variable budgeted manufacturing cost 5 per unit Total budgeted fixed manufacturing costs $ 2,640,000 Total budgeted operating (non-mfg.) costs (all fixed) $ 280,000 Print Done 4 Required 1. What is the production-volume variance for the year when the denominator level is (a) theoretical capacity, (b) practical capacity, and (c) normal capacity utilization? 2. Prepare absorption costing-based statements of comprehensive income for Cole Corporation using theoretical capacity, practical capacity, and normal capacity utilization as the denominator levels. 3. Why is the operating income under normal capacity utilization lower than the other two scenarios? 4. Reconcile the difference in operating income based on theoretical capacity and practical capacity with the difference in fixed manufacturing overhead included in inventory. - X prod ber um a) ion use 5 6 Print Done Pr volum