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 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 $2.50 per bulb. Fixed manufacturing costs are S1,170,000 per year. Variable and fixed selling and administrative expenses are $0.35 per bulb sold and $270,000, respectively. Because its light bulbs are currently popular with environmentally conscious customers, EGL can sell the bulbs for $9.10 each. EGL is deciding among various concepts of capacity for calculating the cost of each unit produced. Its choices are as follows: E: (Click the icon to view the capacity information.) Read the requirements 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 i Requirements Data Table 900.000 bulbs 1. Calculate the inventoriable cost per unit using each level capacity to compute fixed manufacturing cost per unit. 2. Suppose EGL actually produces 300,000 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 225,000 bulbs, calculate operating income for EGL using each type of capacity to compute fixed manufacturing cost per unit. Theoretical capacity Practical capacity Normal capacity Master-budget capacity 520,000 bulbs 260,000 bulbs (average expected output for the next three years) 225,000 bulbs expected production this year Choose ? Print Done parts Print Done remaid Clear All Check