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Question - Steve Harvey Company uses absorption costing and reports the following information:
Variances
Production Volume Variance $70,000 Unfavorable
Flexible Budget Variance for Fixed Factory Overhead$100,000 Unfavorable
Flexible Budget Variance for Variable Overhead $40,000 Favorable
Flexible Budget Variance for Direct Materials $20,000 Favorable
Before consideration of the above variances, the company has operating income of $1,500,000. What is the operating income after considering the above variances?
A) $1,330,000
B) $1,390,000
C) $1,400,000
D) $1,560,000
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