The Standard Factory Overhead Rate Is $7

question 136

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

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Definitions:

Strategic Choices

Decisions made by an organization that are foundational to its long-term goals, direction, and overall strategy.

Organization Design

The process of structuring and arranging the components of a system, company, or entity to effectively achieve its objectives and goals.

Centralization

The concentration of decision-making authority at the upper levels of an organization or system.

Decentralization

Refers to distributing the decision-making powers and leadership roles away from a central authority to more local or individual levels within an organization.