Question

Regier Company had planned for operating income of $10 million in the master budget but actually achieved operating income of only $7 million.
A) The static-budget variance for operating income is $3 million favorable.
B) The static-budget variance for operating income is $3 million unfavorable.
C) The flexible-budget variance for operating income is $3 million favorable.
D) The flexible-budget variance for operating income is $3 million unfavorable.

Answer 1

Answer:

option B

Explanation:

the correct answer is option B

operating income is the income of the company which is calculated after the deduction of all the operations.

but in the given question the company planned operating income of $10 million but the achieved outcome is only $7 million.

so, this condition is unfavorable and have the variance of $3 million