Steven was feeling quite pleased with his company's performance last year. Sales of its power strips with USB ports were strong, and last year it reported positive income for the first time since its inception. Steven is charged with putting together this coming year's budgeted income statement. The intention is to build some inventory for the future, since the company completely ran out of stock last year. Because it is still a relatively new company, management wants to consider how a few different denominator levels would affect its fixed-MOH rate. The following information shows originally budgeted amounts for this year. Selling price Budgeted variable manufacturing costs Budgeted fixed-MOH cost $13 per unit $3 per unit $187,200 160,000 units Theoretical capacity Practical capacity Normal capacity 130,000 units 90,000 units Present partial income statements through gross margin for each denominator level, assuming there are no price or efficiency variances. Company policy is to write off any variances directly to COGS. Sales Less COGS Fixed-MOH Volume Variance Adjusted COGS COGS Fixed-MOH Volume Variance Gross Margin Operating Expenses Operating Income Sales Unadjusted COGS 1690000 Practical 2080000 $ Theoretical tA +A 45630 i 12960 2034370 +A +A +A +A +A Assistance Used