P9-37 (similar to) Question Help Fortune Lager has just purchased the Philadelphia Brewery. The brewery is 2 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 Philadelphia Brewery's capacity and budgeted fixed manufacturing costs for 2020: (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 fixe i Data Table MOH rate per ba i Requirements X A B C D E Budgeted Fixed Days of Hours of Manufacturing Production Production Barrels per Denominator-Level Capacity Concept Overhead per Period per Period per Day Hour 1. Compute the budgeted fixed manufacturing overhead rate per barrel for each of the 2 Theoretical capacity 27,900,000 362 24 600 denominator-level capacity concepts. Explain why they are different. 2. In 2020, the Philadelphia Brewery reported these production results: 3 Practical capacity 27,900,000 354 20 495 A B 4 Normal capacity utilization 27,900,000 354 20 410 12 Beginning inventory in barrels, 1-1-2020 Master-budget capacity utilization for 5 each half year: 13 Production in barrels 2,630,000 6 (a) January-June 2020 13,950,000 177 20 340 14 Ending inventory in barrels, 12-31-2020 190,000 7 (b) July-December 2020 13,950,000 177 20 480 15 Actual variable manufacturing costs $ 79,031,500 16 Actual fixed manufacturing overhead costs $ 26,600,000 Print Done There are no variable cost variances. Fixed manufacturing overhead cost variances are written Choose from any dro off to cost of goods sold in the period in which they occur Compute the Philadelphia Brewery's operating income when the denominator-level capacity is (a) theoretical capacity, (b) practical Check Answer 12 parts capacity, and (c) normal capacity utilization. remaining