In 2015, the Montpazier brewery of Bires Ronsard showed these results: Unit data in barrels Opening stock,

In 2015, the Montpazier brewery of Bières Ronsard showed these results:
Unit data in barrels
Opening stock, 1 January 2015........................0
Production.....................................2 600 000
Closing stock, 31 December 2015............200 000
The Montpazier brewery had actual costs of:
Cost data
Variable manufacturing................€120 380 000
Fixed manufacturing overhead.........€40 632 000
The sales division of Bières Ronsard purchased 2 400 000 barrels in 2015 at the €68 per barrel rate.
All manufacturing variances are written off to cost of goods sold in the period in which they are incurred.
Required
1. Calculate the operating profit of the Montpazier brewery using the following: (a) theoretical capacity, (b) practical capacity and (c) normal utilisation denominator-level concepts. Explain any differences among (a), (b) and (c).
2. What denominator-level concept would Bières Ronsard prefer for income tax reporting? Explain.
3. Explain the ways in which the tax office might restrict the flexibility of a company like Bières Ronsard, which uses absorption costing, to reduce its reported taxable income.