(Click the icon to view the data.) here are no price, spending, or efficiency variances. Actual operating costs equal budgeted operating costs. The production-volume variance is written off to cost of goods sold. For each choice of denominator level, the budgeted production cost per unit is also the cost per unit of beginning mventory. tead the requirements tequirement 1. What is the production-volume variance in 2017 when the denominator level is (a) theoretical capacity, (b) practical capacity, and (c) normal capacity utilization? egin by determining the formula that is used to calculate the production-volume variance. (Abbreviations used: Bdgt = Budgeted, Mfg. = Manufacturing.) Production- Total bdgt fixed mfg costs -( Fixed mfg overhead rate )= volume variance Actual production . O Data Table lext calculate the production-volume variance for each denominator level (a) theoretical capacity, (b) practical capacity, and (c) normal capacity utilization. Label each variance as favorable (F) or unfavorable (U) Production- Сарacity type a) Theoretical b) Practical c) Normal volume variance $ 388,500 87,500 U Theoretical capacity 250,000 units 407,000 F Practical capacity 222,000 units tequirement 2. Prepare absorption costing-based income statements for Stenback Corporation using theoretical capacity, practical capacity, and normal capacity utilization as the denominator levels. Normal capacity utilization 187,500 units Selling price $36 per unit repare the income statements one at a time, beginning with theoretical. O Requirements - X Beginning inventory 20,000 units Theoretical 8280000 Production 215,000 units Revenue Sales volume 230,000 units Cost of goods sold 1. What is the production-volume variance in 2017 when the denominator level is (a) theoretical capacity, (b) practical capacity, and (c) normal capacity utilization? 2. Prepare absorption costing-based income statements for Stenback Corporation using theoretical capacity, practical capacity, and normal capacity utilization as the denominator levels. 3. Why is the operating income under normal capacity utilization lower than the other two scenarios? 4. Reconcile the difference in operating income based on theoretical capacity and practical capacity with Variable budgeted manufacturing cost $4 per unit Beginning inventory Total budgeted fixed manufacturing costs $2,775,000 hoose from any list or enter any number in the input fields and then Total budgeted operating (non-manuf.) costs (all fixed) $220,000 parts