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Company Y absorbs fixed production overheads using a rate per machine hour.

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Company Y absorbs fixed production overheads using a rate per machine hour. Budgeted and actual data for month 8 are as follows:

What is the fixed production overhead efficiency variance?

A.

$400,000 favourable

B.

$400,000 adverse

C.

$1,000,000 favourable

D.

$1,000,000 adverse

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