6. Provide one caution that will affect whether a production-volume variance is a good measure of the economic cost of unused capacity. O A. An important caveat is what change in labour might have been necessary to attain the level of sales assumed in the denominator of the fixed manufacturing overhead rate. For example, the entry of a new high-price competitor may have reduced supply below the denominator level if the budgeted selling price was maintained. An unfavourable production-volume variance may be small relative to the selling price variance had prices been increased to attain the denominator level of unit sales. OB. An important caveat is what change in selling price might have been necessary to attain the level of sales assumed in the denominator of the fixed manufacturing overhead rate. For example, the entry of a new low-price competitor may have reduced demand below the denominator level if the budgeted selling price was maintained. An unfavourable production-volume variance may be small relative to the selling price variance had prices been dropped to attain the denominator level of unit sales. OC. An important caveat is what change in production might have been necessary to attain the level of production assumed in the denominator of the fixed manufacturing overhead rate. For example, the entry of a new low-price competitor may have reduced demand below the denominator level if the budgeted selling price was maintained. A favourable production-volume variance may be small relative to the selling price variance had prices been dropped to attain the denominator level of unit sales. OD. None of the above