Prevo Products Inc

Multiple Choice

Prevo Products Inc. has a $15,000 unfavorable flexible budget variance for July. Which of the following statements is true, if July's actual net operating income was $300,000?

A) Prevo's static budget must have showed a net operating income of $315,000.
B) Prevo's static budget must have showed a net operating income of $285,000.
C) Prevo's flexible budget must have showed a net operating income of $315,000.
D) Prevo's flexible budget must have showed a net operating income of $285,000.