Question: Problem 2-Capacity Concepts Alternative denominators: (40 points) You are the analyst for the Very Big Company (VBC). At your suggestion, the company is studying the

Problem 2-Capacity Concepts Alternative denominators: (40 points) You are the analyst

Problem 2-Capacity Concepts Alternative denominators: (40 points) You are the analyst for the Very Big Company (VBC). At your suggestion, the company is studying the impact of Capacity Concepts. To do a full analysis of the just completed year, the following facts were gathered: Budgeted Practical Capacity Budgeted Normal Capacity Actual Fixed Manufacturing Overhead $14,000,000 $14,000,000 $13,852,647 4,000,000 2,800,000 2,988,750 Required: (show calculations for full credit) a) What is the Fixed Manufacturing Overhead Rate per unit using: a) Budgeted Practical Capacity b) Budgeted Normal Capacity b) What is the Fixed Manufacturing Overhead variance if VBC used: a) Budgeted Practical Capacity b) Budgeted Normal Capacity

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