Earth's Best Light (EBL), a producer of energy-efficient light bulbs, expects that demand will increase markedly over the next decade. Due to the high fixed costs involved in the business, EBL has decided to evaluate its financial performance using absorption costing income. The production-volume variance is written off to cost of goods sold. The variable cost of production is $2.70 per bulb. Fixed manufacturing costs are $1,020,000 per year. Variable and fixed selling and administrative expenses are $0.25 per bulb sold and $210,000, respectively. Because its light bulbs are currently popular with environmentally conscious customers, EBL can sell the bulbs for $9.40 each. EBL is deciding among various concepts of capacity for calculating the cost of each unit produced. Its choices are as follows: (Click the icon to view the capacity information.) Read the requirements. i Data Table . X Requirement 1. Calculate the inventoriable cost per unit using each level of capacity to compute fixed manufacturing cost per unit. Begin by determining the formula to calculate the inventoriable cost per unit. (Abbreviations used: mig - manufacturing, admin. = administrati Theoretical capacity 850,000 bulbs Inventoriable cost per unit Practical capacity 425,000 bulbs Now calculate the inventoriable cost per unit at each level of capacity. Normal capacity 272,000 bulbs (average expected output for the next 3 years) Inventoriable Master-budget capacity 212,500 bulbs expected production this year Capacity type cost per unit Theoretical i Requirements - X Practical Normal Master Budget 1. Calculate the inventoriable cost per unit using each level of capacity to Requirement 2. Suppose EBL actually produces 250,000 bulbs. Calculate the production-volume variance using each level of capacity to compute the fixed compute fixed manufacturing cost per unit. 2. Suppose EBL actually produces 250,000 bulbs. Calculate the Determine the formula that is used to calculate the production-volume variance. (Abbreviation used: mig - manufacturing.) production-volume variance using each level of capacity to compute the fixed Production-volume manufacturing overhead allocation rate. 3. Assume EBL has no beginning inventory. If this year's actual sales are variance 212,500 bulbs (and production is 250,000 bulbs), calculate operating income for EBL using each type of capacity to compute fixed manufacturing cost per Alout soloulato the production ualuma variance at roch laval of conn unit. Choose from any list or enter any number in the input fields and then continue to the next question. Print Done