Steve Harvey Company uses absorption costing and reports the following information: Variances Production Volume Variance $70,000 Unfavorable Flexible Budget Variance for Fixed Factory Overhead$100,000 Unfavorable Flexible Budget Variance for Variable Overhead $40,000 Favorable Flexible Budget Variance for Direct Materials $20,000 Favorable Before consideration of the above variances, the company has operating income of $1,500,000. What is the operating income after considering the above variances? A) $1,330,000 B) $1,390,000 C) $1,400,000 D) $1,560,000 Answer: B

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