Super Lager has just purchased the Pittsburgh Brewery. The brewery is two years old and uses absorption costing. It will "sell" its product to SuperLager at $44 per barrel. Peter Bryant, Super Lager's controller, obtains the following information about Pittsburgh Brewery's capacity and budgeted fixed manufacturing costs for 2014 :

Data Table Days of Production Production Barrels per Period Hours of Budgeted Fixed Manufacturing Overhead per Period Denominator-Level Capacity Concept per Day 24. 20 20 per Hour 535 500 390 $27,900,000 360 350 350 Theoretical capacity Practical capacity Normal capacity utilization Master-budget capacity for each half year (a) January-June 2014 (b) July-December 2014 27,900,000 $27,900,000 13,950,000 175 20 320 13,950,000 175 20 460 PrintDone