Johnson Company had planned for operating income of $10 million in the master budget with a contribution margin of $3 million, but actually achieved operating income of only $7 million and a contribution margin of $2.5 million.

A.

The

staticminusbudget

variance for operating income is $3 million favorable.

B.

The

staticminusbudget

variance for operating income is $3 million unfavorable.

C.

The

flexibleminusbudget

variance for operating income is $3 million unfavorable.

D.

The

flexibleminusbudget

variance for operating income is $3 million favorable.