Zippy, Inc., is a manufacturer of the very popular G36 motorcycles. The management at Zippy has recently adopted absorption costing and is debating which denominator-level concept to use. The G36 motorcycles sell for an average price of $8,300. Budgeted fixed manufacturing overhead costs for 2020 are estimated at $6,480,000. Zippy, Inc., uses subassembly operators that provide component parts. The following are the denominator-level options that management has been considering: i (Click the icon to view the options.) Read the requirements. More info - a. Theoretical capacity-based on three shifts, completion of five motorcycles per shift, and a 360-day year-3 5 360 = 5,400. b. Practical capacity-theoretical capacity adjusted for unavoidable interruptions, breakdowns, and so forth-3 4 320 = 3,840. c. Normal capacity utilization-estimated at 3,240 units. d. Master-budget capacity utilization-the strengthening stock market and the growing popularity of motorcycles have prompted the marketing department to issue an estimate for 2020 of 3,600 units.