The Standard Factory Overhead Rate Is $7

Multiple Choice

The standard factory overhead rate is $7.50 per machine hour ($6.20 for variable factory overhead and $1.30 for fixed factory overhead) based on 100% of normal capacity of 80,000 machine hours. The standard cost and the actual cost of factory overhead for the production of 15,000 units during August were as follows: ​
-Favorable volume variances may be harmful when

A) machine repairs cause work stoppages
B) supervisors fail to maintain an even flow of work
C) production in excess of normal capacity cannot be sold
D) all of these choices