Fortune Lager has just purchased the Austin Brewery. The brewery is two years old and uses absorption costing. It will "sell" its product to Fortune Lager at $43 per barrel. Peter Bryant, Fortune Lager's controller, obtains the following information about Austin Brewery's capacity and budgeted fixed manufacturing costs for 2017: (Click the icon to view the information.) Read the requirements. Requirement 1. Compute the budgeted fixed manufacturing overhead rate per barrel for each of the denominator-level capacity concepts. Explain why they are different. Begin by determing the formula to calculate the budgeted fixed manufacturing overhead rate per barrel, then compute the rate for each of the denominator-level capacity concepts. (Abbreviations used: Budg. = budgeted, MOH = manufacturing overhead. Round the rates to the nearest cent.) = Budgeted fixed MOH rate per barrel Fecture Leser bas just purchased the Austin Browae. The browaris two years old and uses abcoration costing It will "sell" its product Data table Budgeted Fixed Manufacturing Days of Hours of Production Production Barrels per Denominator-Level Capacity Concept Overhead per Period per Period per Day Hour Theoretical capacity $ 27,700,000 362 Practical capacity $ 27,700,000 350 Normal capacity utilization $ 27,700,000 350 222 24 600 20 490 20 420 Master-budget capacity utilization for each half year: (a) January-June 2017 69 $ 13,850,000 175 (b) July-December 2017 $ 13,850,000 175 22 20 320 20 520 Print Done D Requirements 1. Compute the budgeted fixed manufacturing overhead rate per barrel for each of the denominator-level capacity concepts. Explain why they are different. 2. In 2017, the Austin Brewery reported these production results: Beginning inventory in barrels, 1-1-2017 Production in barrels Ending inventory in barrels, 12-31-2017 Actual variable manufacturing costs 2,660,000 190,000 $ 79,933,000 Actual fixed manufacturing overhead costs $ 26,900,000 There are no variable cost variances. Fixed manufacturing overhead cost variances are written off to cost of goods sold in the period in which they occur. Compute the Austin Brewery's operating income when the denominator-level capacity is (a) theoretical capacity, (b) practical capacity, and (c) normal capacity utilization. Print Done - fa ity f X b