Posted: March 3rd, 2017

Smith Corp. has a $6,000 favorable flexible budget variance for January. If January’s flexible budget net income was $100,000, which of the following statements is true?

Smith Corp. has a $6,000 favorable flexible budget variance for January. If January’s flexible budget net income was $100,000, which of the following statements is true?
A. Smith’s static budget must have showed net income of $106,000.
B. Smith’s static budget must have showed net income of $94,000.
C. Smith’s actual net income must have been $106,000
D. Smith’s actual net income must have been $94,000.