If two factories produce the exact same product having the same costs, and factory costs are completely allocated to the individual products, the factory operating at 80% capacity (while the other operates at 100% capacity)

would have a lower rate of cost allocation to each unit of production.

would have a higher rate of cost allocation to each unit of production.

would have the same rate of cost allocation to each unit of production as the 100% capacity operation.

would be operating at a loss, because of unused capacity.