Lucky Lager has just purchased the Atlanta Brewery. The brewery is two years old and uses absorption costing. It will "sell" its product to Lucky Lager at $ 46 per barrel. Peter Bryant, Lucky Lager's controller, obtains the following information about Atlanta Brewery's capacity and budgeted fixed manufacturing costs for 2014 :

Requirements:

Budgeted Fixed Manufacturing Overhead per Per Days of Hours of Denominator-Level Production Production Barrels iod per Period per Day 24 20 20 per Hour 535 490 Capacity Concept 356 352 352 Theoretical capacity Practical capacity Normal capacity utilization Master-budget capacity for each half year (a) January-June 2014 (b) July-December 2014 28,200,000 28,200,000 28,200,000 14,100,000 176 20 315 14,100,000 176 20 505 Budgeted Fixed Manufacturing Overhead per Per Days of Hours of Denominator-Level Production Production Barrels iod per Period per Day 24 20 20 per Hour 535 490 Capacity Concept 356 352 352 Theoretical capacity Practical capacity Normal capacity utilization Master-budget capacity for each half year (a) January-June 2014 (b) July-December 2014 28,200,000 28,200,000 28,200,000 14,100,000 176 20 315 14,100,000 176 20 505