When Machine-Hours Are Used as a Cost Allocation Base, the Item

Multiple Choice

When machine-hours are used as a cost allocation base, the item MOST likely to contribute to a favourable production-volume variance is

A) an increase in the selling price of the product.
B) the purchase of a new manufacturing machine costing considerably less than expected.
C) a decline in the cost of energy.
D) strengthened demand for the product.
E) a competitor lowering the price of a similar product.