GA B D Budgeted Fixed Days of Hours of Manufacturing Production Production Barrels per 1 Denominator-Level Capacity Concept Overhead per Period per Period per Day Hour 2 Theoretical capacity $ 27,900,000 362 22 545 3 Practical capacity $ 27,900,000 340 20 490 4 Normal capacity utilization 27,900,000 340 20 420 Master-budget capacity utilization for 5 each half year 6 (a) January, June 2020 13,950,000 170 20 330 7 (b) July-December 2020 13,950,000 170 20 510 S S ba GA Fortune Lager has just purchased the Cleveland Brewery. The brewery is 2 years old and unes absorption costing It will tell its product to Fortune Lager at 546 per barrel Peter Bryant, Fortune Lager's controller, obtain the following information about Cleveland Brewery's capacity and budgeted fixed manufacturing costs for 2020 (Click the icon to view the Information) Read the coquirements (b) July-December 2020 13.950 000 1734,000 = 04 Explain why they are different The theoretical and practical capacity concepts emphasize supply factors, while normal capacity feation and master budget utilization concepts emphasize demand factors The she-month rates for the master-budget utilization concept are different because of seatonal diferences in budgeted production Requirement 2. Compute the Cleveland Brewery's operating income when the denominator bevel capacity in (a) theoretical capacity. (b) practical capacity, and (c) normal capacity utilization Begin by completing the following table to help you compute the operating income for each denominator-level capacity concept (Round the rates to the nearest cont Per barrel Budgeted variable mig cost rato Budgeted fored MOH rate per barrel Denominator-level capacity concept Theoretical capacity Fixed MOH Budgeted total mig cootrato 3673 costs allocated ca Idm an ei th b) pre olla 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 2020, the Cleveland Brewery reported these production results A B 12 Beginning inventory in barrels, 1-1-2020 0 13 Production in barrels 2,650,000 14 Ending inventory in barrels, 12-31-2020 230.000 15 Actual variable manufacturing costs $ 80,295.000 16 Actual fixed manufacturing overhead costs $ 27,300,000 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 Cleveland Brewery's operating income when the denominator-level capacity is (a) theoretical capacity, (b) practical capacity, and (c) normal capacity utilization the GA B D Budgeted Fixed Days of Hours of Manufacturing Production Production Barrels per 1 Denominator-Level Capacity Concept Overhead per Period per Period per Day Hour 2 Theoretical capacity $ 27,900,000 362 22 545 3 Practical capacity $ 27,900,000 340 20 490 4 Normal capacity utilization 27,900,000 340 20 420 Master-budget capacity utilization for 5 each half year 6 (a) January, June 2020 13,950,000 170 20 330 7 (b) July-December 2020 13,950,000 170 20 510 S S ba GA Fortune Lager has just purchased the Cleveland Brewery. The brewery is 2 years old and unes absorption costing It will tell its product to Fortune Lager at 546 per barrel Peter Bryant, Fortune Lager's controller, obtain the following information about Cleveland Brewery's capacity and budgeted fixed manufacturing costs for 2020 (Click the icon to view the Information) Read the coquirements (b) July-December 2020 13.950 000 1734,000 = 04 Explain why they are different The theoretical and practical capacity concepts emphasize supply factors, while normal capacity feation and master budget utilization concepts emphasize demand factors The she-month rates for the master-budget utilization concept are different because of seatonal diferences in budgeted production Requirement 2. Compute the Cleveland Brewery's operating income when the denominator bevel capacity in (a) theoretical capacity. (b) practical capacity, and (c) normal capacity utilization Begin by completing the following table to help you compute the operating income for each denominator-level capacity concept (Round the rates to the nearest cont Per barrel Budgeted variable mig cost rato Budgeted fored MOH rate per barrel Denominator-level capacity concept Theoretical capacity Fixed MOH Budgeted total mig cootrato 3673 costs allocated ca Idm an ei th b) pre olla 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 2020, the Cleveland Brewery reported these production results A B 12 Beginning inventory in barrels, 1-1-2020 0 13 Production in barrels 2,650,000 14 Ending inventory in barrels, 12-31-2020 230.000 15 Actual variable manufacturing costs $ 80,295.000 16 Actual fixed manufacturing overhead costs $ 27,300,000 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 Cleveland Brewery's operating income when the denominator-level capacity is (a) theoretical capacity, (b) practical capacity, and (c) normal capacity utilization the
