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The Santos Corporation Made an Error When Selecting a Denominator

Question 75

Multiple Choice

The Santos Corporation made an error when selecting a denominator level of activity and chose a much lower level than was realistic. This error would most likely result in a large:


A) favorable variable overhead efficiency variance.
B) favorable fixed manufacturing overhead budget variance.
C) favorable fixed manufacturing overhead volume variance.
D) unfavorable fixed manufacturing overhead budget variance.

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