Please complete Requirements 1 and 2. Thank You!
Homework: Chapter 9 Problems Question 5, P9-37 (simil... Part 5 of 13 HW Score: 5.43%, 1.09 of 20 points Points: 0.49 of 3 Save Tolman Lager has just purchased the Atlanta Brewery. The brewery is two years old and uses absorption costing. It will "sell" its product to Tolman Lager at $48 per barrel. Peter Bryant, Tolman Lager's controller, obtains the following information about Atlanta 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 Data table Budg. fixed MOH per period 1 Budg. denominator level (barrels) Theoretical capacity $ 4,699,200 = $ 5.89 27,700,000 27,700,000/ Days of Practical capacity $ 3,536,000 = $ 7.83 Budgeted Fixed Manufacturing Overhead per Period per Period Hours of Production Production Barrels per per Day Hour 356 22 600 Normal capacity utilization $ 27,700,000/ 2.720.000 = $ 10.18 $ 27,700,000 $ 27,700,000 340 20 520 Master-budget capacity for each half year: (a) JanuaryJune 2017 Denominator-Level Capacity Concept Theoretical capacity Practical capacity Normal capacity utilization Master-budget capacity utilization for each half year: (a) JanuaryJune 2017 (b) July-December 2017 $ 27,700,000 340 20 400 Requirements $ 13,850,000 170 20 325 $ 13,850,000 170 20 475 Print Done 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 Atlanta Brewery reported these production results: Beginning inventory in barrels, 1-1-2017 0 Production in barrels 2,590,000 Ending inventory in barrels, 12-31-2017 180,000 Actual variable manufacturing costs $ 77,829,500 Actual fixed manufacturing overhead costs $ 27,200,000 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 Atlanta Brewery's operating income when the denominator-level capacity is (a) theoretical capacity, (b) practical capacity, and (c) normal capacity utilization
