Quilcene Oysteria farms and sells oysters in the Pacific Northwest. The company harvested and sold 7,500 pounds of oysters in August. The company’s flexible budget for August appears below:
Quilcene Oysteria | ||
Flexible Budget | ||
For the Month Ended August 31 | ||
Actual pounds (q) | 7,500 | |
Revenue ($4.15q) | $ | 31,125 |
Expenses: | ||
Packing supplies ($0.35q) | 2,625 | |
Oyster bed maintenance ($3,300) | 3,300 | |
Wages and salaries ($2,500 + $0.30q) | 4,750 | |
Shipping ($0.65q) | 4,875 | |
Utilities ($1,280) | 1,280 | |
Other ($400 + $0.01q) | 475 | |
Total expense | 17,305 | |
Net operating income | $ | 13,820 |
The actual results for August appear below:
Quilcene Oysteria | ||
Income Statement | ||
For the Month Ended August 31 | ||
Actual pounds | 7,500 | |
Revenue | $ | 27,400 |
Expenses: | ||
Packing supplies | 2,795 | |
Oyster bed maintenance | 3,160 | |
Wages and salaries | 5,160 | |
Shipping | 4,605 | |
Utilities | 1,090 | |
Other | 1,095 | |
Total expense | 17,905 | |
Net operating income | $ | 9,495 |
Required:
Calculate the company’s revenue and spending variances for August. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.)
|
Answer
Conceptual notes: |
#1: Flexible Budget data is based on 'budgeted rates' applied on 'actual level/output/units' |
#2: Revenue & Spending Variance = Difference between 'Actual data' and 'Flexible Budget data' |
* Favourable Variance in case of Revenues occurs when: |
>Actual revenues are MORE than Flexible budget revenues [Spending Variance] |
* Unfavourable Variance in case of Revenues occurs when: |
>Actual revenues are LESS than Flexible budget revenues [Spending Variance] |
* Favourable Variance in case of Expenses/Costs occurs when: |
>Actual expenses/costs are LESS than Flexible budget expense/costs [Spending Variance] |
* Unfavourable Variance in case of Expenses/Costs occurs when: |
>Actual expenses/costs are MORE than Flexible budget expense/costs [Spending Variance] |
Actual Result |
Revenue & Spending Variance |
Flexible Budget |
||
No. of pounds |
7,500 |
7,500 |
||
[A] |
[B = Difference between A & C] |
[C = Fixed + (Var x Actual units)] |
||
Revenues |
$27,400 |
$3,725 |
U |
$31,125 |
Expenses: |
||||
Packing supplies |
$2,795 |
$170 |
U |
$2,625 |
Oyster bed maintenance |
$3,160 |
$140 |
F |
$3,300 |
Wages & Salaries |
$5,160 |
$410 |
U |
$4,750 |
Shipping |
$4,605 |
$270 |
F |
$4,875 |
Utilities |
$1,090 |
$190 |
F |
$1,280 |
Other |
$1,095 |
$620 |
U |
$475 |
Total Expenses |
$17,905 |
$600 |
U |
$17,305 |
Net Operating Income |
$9,495 |
$4,325 |
U |
$13,820 |
--Working
WORKING COLUMNS |
||||||
No. of pounds |
||||||
Fixed part |
+( |
Variable part |
x |
Actual/Planned units |
) |
|
Revenues |
$ 4.15 |
x |
7500 |
|||
Expenses: |
7500 |
|||||
Packing supplies |
$0 |
+( |
$ 0.35 |
x |
7500 |
) |
Oyster bed maintenance |
$3,300 |
+( |
$ - |
x |
7500 |
) |
Wages & Salaries |
$2,500 |
+( |
$ 0.30 |
x |
7500 |
) |
Shipping |
$0 |
+( |
$ 0.65 |
x |
7500 |
) |
Utilities |
$1,280 |
+( |
$ - |
x |
7500 |
) |
Other |
$400 |
+( |
$ 0.01 |
x |
7500 |
) |
Total Expenses |
$7,480 |
+( |
$ 1.31 |
x |
7500 |
) |
Net Operating Income |
Quilcene Oysteria farms and sells oysters in the Pacific Northwest. The company harvested and sold 7,500...
Quilcene Oysteria farms and sells oysters in the Pacific Northwest. The company harvested and sold 7,500 pounds of oysters in August. The company's flexible budget for August appears below: Quilcene Oysteria Flexible Budget For the Month Ended August 31 Actual pounds (9) 7,500 $ 31,500 Revenue ($4.209) Expenses: Packing supplies ($0.259) Oyster bed maintenance ($3,500) Wages and salaries ($2,400 + $0.459) Shipping ($0.559) Utilities ($1,250) Other ($420 + $0.019) Total expense Net operating income 1,875 3,500 5,775 4,125 1,250 495...
Quilcene Oysteria farms and sells oysters in the Pacific Northwest. The company harvested and sold 7,100 pounds of oysters in August. The company's flexible budget for August appears below: Flexible Budget For the Month Ended August 31 Actual pounds (a) Revenue ($4.20q) $29,820 Packing supplies (S0.35q) Oyster bed maintenance ($3,300) Wages and salaries ($2,300 $0.50q) Shipping ($0.65q) Utilities (S1,240) Other ($480+ $0.01q) 2.485 3,300 5,850 4,615 551 Total expense Net operating income $11,779 The actual results for August appear below:...
Quilcene Oysteria farms and sells oysters in the Pacific Northwest. The company harvested and sold 7,500 pounds of oysters in August. The company's flexible budget for August appears below: Quilcene Oysteria Flexible Budget For the Month Ended August 31 Actual pounds (9) 7,500 $ 31,875 Revenue ($4.259) Expenses Packing supplies ($0.359) Oyster bed maintenance ($3,000) Wages and salaries ($2,600 + $0.409) Shipping ($0.559) Utilities ($1,250) Other ($440 + $0.019) Total expense Net operating income 2,625 3,000 5,600 4,125 1,250 515...
Quilcene Oysteria farms and sells oysters in the Pacific Northwest. The company harvested and sold 7,300 pounds of oysters in August. The company’s flexible budget for August appears below: Quilcene Oysteria Flexible Budget For the Month Ended August 31 Actual pounds (q) 7,300 Revenue ($4.20q) $ 30,660 Expenses: Packing supplies ($0.30q) 2,190 Oyster bed maintenance ($3,000) 3,000 Wages and salaries ($2,100 + $0.35q) 4,655 Shipping ($0.65q) 4,745 Utilities ($1,260) 1,260 Other ($450 + $0.01q) 523 Total expense 16,373 Net operating...
Quilcene Oysteria farms and sells oysters in the Pacific Northwest. The company harvested and sold 7,600 pounds of oysters in August. The company’s flexible budget for August appears below: Quilcene Oysteria Flexible Budget For the Month Ended August 31 Actual pounds (q) 7,600 Revenue ($4.15q) $ 31,540 Expenses: Packing supplies ($0.25q) 1,900 Oyster bed maintenance ($3,100) 3,100 Wages and salaries ($2,100 + $0.50q) 5,900 Shipping ($0.75q) 5,700 Utilities ($1,290) 1,290 Other ($420 + $0.01q) 496 Total expense 18,386 Net operating...
Quilcene Oysteria farms and sells oysters in the Pacific Northwest. The company harvested and sold 7,600 pounds of oysters in August. The company's flexible budget for August appears below: Quilcene Oysteria Flexible Budget For the Month Ended August 31 Actual pounds (9) 7,600 $ 30,780 Revenue ($4.659) Expenses: Packing supplies ($0.409) Oyster bed maintenance ($3,500) Wages and salaries ($2,500 + $0.459) Shipping ($0.759) Utilities ($1,280) Other ($430 + $0.019) Total expense Net operating income 3,040 3,500 5,920 5,700 1,280 506...
Quilcene Oysteria farms and sells oysters in the Pacific Northwest. The company harvested and sold 7,100 pounds of oysters in August. The company's flexible budget for August appears below: Quilcene Oysteria Flexible Budget For the Month Ended August 31 Actual pounds (9) 7.100 $ 28,755 Revenue ($4.059) Expenses Packing supplies ($0.309) Oyster bed maintenance ($3,200) Wages and salaries ($2,200 + $0.35) Shipping ($0.809) Utilities ($1,280) Other ($450 + $0.019) Total expense Net operating income 2.130 3,200 4,685 5,680 1,280 521...
Quilcene Oysteria farms and sells oysters in the Pacific Northwest. The company harvested and sold 7,500 pounds of oysters in August. The company’s flexible budget for August appears below: Quilcene Oysteria Flexible Budget For the Month Ended August 31 Actual pounds (q) 7,500 Revenue ($4.20q) $ 31,500 Expenses: Packing supplies ($0.40q) 3,000 Oyster bed maintenance ($3,400) 3,400 Wages and salaries ($2,100 + $0.25q) 3,975 Shipping ($0.60q) 4,500 Utilities ($1,290) 1,290 Other ($470 + $0.01q) 545 Total expense 16,710 Net operating...
Quilcene Oysteria farms and sells oysters in the Pacific Northwest. The company harvested and sold 7,300 pounds of oysters in August. The company's flexible budget for August appears below: Quilcene Oysteria Flexible Budget For the Month Ended August 31 Actual pounds (9) 7,300 Revenue ($4.209) 9.30,660 Expenses: Packing supplies ($0.40) Oyster bed maintenance ($3,300) Wages and salaries ($2,100 + $0.45) Shipping ($0.659) Utilities ($1,240) Other ($410 + $0.019) 2,920 3,300 5,385 4,745 1,240 483 18,073 Total expense Net operating income...
Quilcene Oysteria farms and sells oysters in the Pacific Northwest. The company harvested and sold 7,600 pounds of oysters in August. The company's flexible budget for August appears below: Quilcene Oysteria Flexible Budget For the Month Ended August 31 Actual pounds (9) 7,600 $31,920 2,280 3,300 Revenue ($4.209) Expenses: Packing supplies ($0.300) Oyster bed maintenance ($3,300) Wages and salaries ($2,400 + $0.30g) Shipping ($0.709) Utilities ($1,220) Other ($430 + $0.019) Total expense Net operating income 4,680 5, 320 1,220 506...