*** Requirement 3. An unfavorable production-volume variance could be interpreted as the economic cost of unused capacity. Why would Top Par be willing to incur this cost? Select all that apply. A. For most products, demand varies from month to month. If Top Par wants to meet demand in high demand months, the company will have excess capacity in low demand months. Having some access capacity would allow Top Par to produce enough to cover peak demand as well as slack to deal with unexpected demand surges in non-peak months. B. Basic economics provides a demand curve that shows a tradeoff between capacity and actual fixed overhead expenses. This creates an inherent cost of unused capacity over which Top Par has no control. C. For most products, demand does not vary from month to month. Top Par may be willing to incur the cost of unused capacity because it is easy to track and makes budgeting more convenient. D. Basic economics provides a demand curve that shows a tradeoff between price charged and quantity demanded. Potentially, Top Par could have lower net revenue if it produces at capacity and sells at a lower price than if it sells at a higher price at some level below capacity. My IM

Requirement 3. An unfavorable production-volume variance could be interpreted as the economic cost of unused capacity. Why would Top Par be willing to incur this cost? Select all that apply. A. For most products, demand varies from month to month. If Top Par wants to meet demand in high demand months, the company will have excess capacity in low demand months. Having some access capacity would allow Top Par to produce enough to cover peak demand as well as slack to deal with unexpected demand surges in non-peak months. B. Basic economics provides a demand curve that shows a tradeoff between capacity and actual fixed overhead expenses. This creates an inherent cost of unused capacity over which Top Par has no control. C. For most products, demand does not vary from month to month. Top Par may be willing to incur the cost of unused capacity because it is easy to track and makes budgeting more convenient. D. Basic economics provides a demand curve that shows a tradeoff between price charged and quantity demanded. Potentially, Top Par could have lower net revenue if it produces at capacity and sells at a lower price than if it selis at a higher price at some level below capacity