Superior Lager has just purchased the Atlanta Brewery, The brewery is two years old and uses absorption costing it will selfils product to Superior Lager at 545 per barrel. Po Bryant, Superior Lager's controller, obtains the following information about Atlanta Brewery's capacity and budgeted foxed manufacturing costs for 2017 (Click the icon to view the information) Read the requirements (0) July Decor 0 Requirements Explain why the utilization and master budget utilization concepts The theoretical emphasize dem The soo month oduction Requirement 2 uzation apacity (b) practical capacity and (c) normal capacity Begin by comp 1. Compute the budgeted foved 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 2,660,000 Ending inventory in Darrels, 12-31-2017 230,000 Actuat variable manufacturing costs $ 30,066,000 Achual fixed manufacturing overhead costs $ 25,800,000 There are no variable cost variances Food 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 cept. (Round the rates to the nearest cont) Denomin Capacity Theoretical cap Practical capac Normal capacity Print Done - X Now compute the operating income ance accounts Budgeted Fixed Manufacturing Denominator Level Capacity Concept Overhead per Period Theoretical capacity $ 27,800,000 Practical capacity $ 27.800,000 Normal capacity utilization S 27.800,000 Master budget capacity utilization for each half year: (a) January June 2017 $ 13.900.000 b) July-December 2017 5 13.900.000 Days of Hours of Production Production Barrels per per Period per Day Hour 362 24 550 352 20 400 352 20 395 Revenues Cost of goods sold Beginning inventory Variable manufacturing costs Food manufacturing overhead costi Cost of goods available for sale Deduct ending inventory 176 20 20 325 465 176 Print Done Choose from any list of enter any Superior Lager has just purchased the Atlanta Brewery, The brewery is two years old and uses absorption costing it will selfils product to Superior Lager at 545 per barrel. Po Bryant, Superior Lager's controller, obtains the following information about Atlanta Brewery's capacity and budgeted foxed manufacturing costs for 2017 (Click the icon to view the information) Read the requirements (0) July Decor 0 Requirements Explain why the utilization and master budget utilization concepts The theoretical emphasize dem The soo month oduction Requirement 2 uzation apacity (b) practical capacity and (c) normal capacity Begin by comp 1. Compute the budgeted foved 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 2,660,000 Ending inventory in Darrels, 12-31-2017 230,000 Actuat variable manufacturing costs $ 30,066,000 Achual fixed manufacturing overhead costs $ 25,800,000 There are no variable cost variances Food 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 cept. (Round the rates to the nearest cont) Denomin Capacity Theoretical cap Practical capac Normal capacity Print Done - X Now compute the operating income ance accounts Budgeted Fixed Manufacturing Denominator Level Capacity Concept Overhead per Period Theoretical capacity $ 27,800,000 Practical capacity $ 27.800,000 Normal capacity utilization S 27.800,000 Master budget capacity utilization for each half year: (a) January June 2017 $ 13.900.000 b) July-December 2017 5 13.900.000 Days of Hours of Production Production Barrels per per Period per Day Hour 362 24 550 352 20 400 352 20 395 Revenues Cost of goods sold Beginning inventory Variable manufacturing costs Food manufacturing overhead costi Cost of goods available for sale Deduct ending inventory 176 20 20 325 465 176 Print Done Choose from any list of enter any
