Prevo Products Inc. has a $20 000 unfavourable flexible budget variance for July. If July's actual net income was $300 000, which of the following statements is true?

Prevo's static budget must have showed net income of $315 000.

Prevo's flexible budget must have showed net income of $285 000.

Prevo's flexible budget must have showed net income of $320 000.

Prevo's static budget must have showed net income of $285 000