Tolman Lager has just purchased the Cleveland Brewery The brewery is two years old and uses absorption cosing information about Cleveland 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 fxed manufachuring overhead rate per barnel for each of the denominato Begin by determing the formula to calculate the budgeted fxed manufacturing overhead rate per bamel, then compute the rate for each of the denominator-level capacity overhead. Round the rates to the nearest cent.) t concepts. (Abbreviations used Budg budgeted, MOH - manufacturing Budgeted xed (1) Budg denominator leve MOH rate per bare Theoretical capacity Practical capacity Normal capacity uilization Master-budget capacity for each half year (a) January June 2017 b) July December 2017 Explain why they are afferent The (3)concepts emphasize supply factors, while (4)-concepts emphasize demand factors. The six-month rates for the master-budget utlization concept (5) Requirement 2. Compute the Cleveland Brewery's operating income when the denominatior-level capacity is (aj theoretica capacity, (b) practical capacity, and (c) normal capacity utlization Begin by completing the following table to help you compute the operalting income for each denominator-level capacily concept. (Round the rates to the nearest cent) Per barre Budgeted xed Budgeted Budgeted rate variable mlg cost rate total mig cost rate costs alocated Fixed MOH capacity concept per bamel Theoretical capacity Practical capacity Normal capacity utilization unfavorable (U).(Enter a "" for any zero balance accounts) Normal capacity Cost of goods sold Beginning inventory Variable manulacturing costs Fixed manulacturing overhead cost allocaled Cost of goods available for sale Deduct ending inventory Adjustment for variances Cost of goods sold Gross margin Other costs Operating income Data Table Budgeted Fixed Days of Hours of Manufacturing Production Production Barrels Capacity Concept Overhead per Perlod per Poariod per Day per Hour 24 27700.000 S 27,700,000 $ 27 700,000 Theoretical capacity Practical capacity Normal capacity utlization Mastor-budget capacity for each hal year (a) January June 2017 b) July December 2017 350 490 20 13.850.00 13850,000 175 20 175 470 1. Compute the budgeted laed manufacturing overthead rate per bamel for each of the denominator-level capacity concepts. Expliain why they are fent 2In 2017,the Cleveland Brewery eported these production ru Beginning inventory in bamls 1-1-2017 Production in barrels 2580.000 230,000 78,174,000 27 200.000 Actual variable manufacturing costs Actual xed manufacturing overhead costs the period in which they ocous Compule the Cleveland Brewery's operating income when the denominatior-evel capacity s (a) theoretical capacity. () practical capacity, and (c) normal capacity unlization 72 O Days of production OBarrels per hour Budg deromnator level rels) OBudgfixed MOH period Ending inventory (barrels) Hours of production Days of production Barrels per hour Ending inventory (barrels OBudg denominator level (barrels) O Hours of production OBudg. fixed MOH per period (3) O nomal capaciy ulization and master-budget uilization O normal capacity uization and practical capacity twebcal and prachcal theoretical apacity and master-tout utkaton (4) nomnal capacity .Aation and mater-tung ukaton O normal capacity ulication and practical capacity horecal capacity and master-bu , (5)are oneront because of seasonal direncies in badgeted prodckn. O are the same because of a standard budgeted production leve O F O F (8) O F
