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 the above

Question

Quizplus · Accepted Answer

Favorable volume variances may be harmful if the production in excess of normal capacity cannot be sold, as it leads to an increase in inventory storage costs and potential obsolescence or spoilage. Machine repairs causing work stoppages and supervisors failing to maintain an even flow of work are unrelated to volume variances.

Favorable Volume Variances May Be Harmful When