Trina Makes Handmade Leis in Hawaii Which She Sells to Local

Multiple Choice

Trina makes handmade leis in Hawaii which she sells to local tourists.She anticipates August to be a busy month with the sale of 500 leis.She has prepared the following static budget for August:
$\begin{array}{lr} \text {Sales revenue (500 units) } &\$5000\\ \text { Variable costs:} &\\ \text { Direct materials } &1000\\ \text { Direct labour} &1000\\ \text { Overhead } &375\\ \text { Fixed costs} &\underline{200}\\ \text { Net income}&\underline{\$2425}\end{array}$

During August,Trina actually produced and sold 400 leis.What should be Trina's net income in August based on a flexible budget?

A) $1940
B) $1825
C) $1425
D) $1900