Exercise 28-1 Overhead Rate Based on Capacity [LO2-6) Wixis Cabinets makes custom wooden cabinets for high-end stereo systems from specialty woods. The co costing system. The capacity of the plant is determined bythe cay of i onstroit, which is ime on the makes finely beveled 189 hours per month. The estimated total manufactur mpany uses a job-order cuts in wood according to the preprogrammed specifications of each cabinet. The bandsaw can operate up to ing overhead cost at capacity is $15,120 per month. The company bases its overhead rate on capacity, so its predetermined overhead rate is $80 per hour of bandsaw use. The results of a recent months operations appear Sales beginaing inventories 43.750 ing inventories s5,350 Manut aeturis overhead ineur ted Actoai 1 hours of bandsaw e Required -a. Prepare 1-b. How much of the cost of unused capacity can be shown on the income statement as a an income statement that records the cost of unused capacity on the income statement as a period expense Prepare an income statement that records the cost of unused capacity on the income statement as a period expense. Cabinets