Planet Light First (PLFPLF), 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, PLFPLF has decided to 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 $ 2.30$2.30 per bulb. Fixed manufacturing costs are $ 1 comma 020 comma 000$1,020,000 per year. Variable and fixed selling and administrative expenses are $ 0.35$0.35 per bulb sold and $ 220 comma 000$220,000, respectively. Because its light bulbs are currently popular with environmentally conscious customers, PLFPLF can sell the bulbs for $ 9.00$9.00 each. PLFPLF is deciding among various concepts of capacity for calculating the cost of each unit produced. Its choices are as follows:

Theoretical capacity

850000

bulbs

Practical capacity

425000

bulbs

Normal capacity

272,000

bulbs (average expected output for the next three years)

Master budget capacity

212,500

bulbs expected production this year

.	Calculate the inventoriable cost per unit using each level of capacity to compute fixed manufacturing cost per unit.
2.	Suppose PLFPLF actually produces 250000 bulbs. Calculate the production-volume variance using each level of capacity to compute the fixed manufacturing overhead allocation rate.
3.	Assume PLFPLF has no beginning inventory. If this year's actual sales are 212500 bulbs, calculate operating income for PLFPLF using each type of capacity to compute fixed manufacturing cost per unit.