Energy Glow Light (EGL), 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, EGL 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 $2.20 per bulb. Fixed manufacturing costs are $1,015,000 per year. Variable and fixed selling and administrative expenses are $0.25 per bulb sold and $260,000, respectively. Because its light bulbs are currently popular with environmentally conscious customers, EGL can sell the bulbs for $9.90 each. EGL is deciding among various concepts of capacity for calculating the cost of each unit produced. Its choices are as follows: Data table 290,000 bulbs (average expected output for the next 3 years) 175,000 bulbs expected production this year Theoretical capacity 725,000 bulbs Practical capacity 406,000 bulbs Normal capacity Master-budget capacity Print Done Requirements 1. Calculate the inventoriable cost per unit using each level of capacity to compute fixed manufacturing cost per unit. 2. Suppose EGL actually produces 250,000 bulbs. Calculate the production-volume variance using each level of capacity to compute the fixed manufacturing overhead allocation rate. 3. Assume EGL has no beginning inventory. If this year's actual sales are 175,000 bulbs (and production is 250,000 bulbs), calculate operating income for EGL using each type of capacity to compute fixed manufacturing cost per unit. Print Done 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: mfg = manufacturing, admin. = administration.) + = Inventoriable cost per unit