Question

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 $ 31,160 Revenue ($4.10q) Expenses: Packing supplies ($0.35q) Oyster bed maintenance ($3,600) Wages and salaries ($2,200 $0.45q) Shipping ($0.65q) Utilities ($1,240) Other ($420 $0.01q) 2,660 3,600 5,620 4,940 1,240 496 18,556 $12,604 Total expense Net operating income The actual results for August appear below: Quilcene Oysteria Income Statement For the Month Ended August 31 Actual pounds 7,600 Revenue $ 27,100 Expense:s Packing supplies Oyster bed maintenance Wages and salaries Shipping Utilities Other 2,830 3,460 6,030 4,670 1,050 1,116 19,156 $ 7,944 Total expense Net operating income 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 1

Quilcene Oysteria

Revenue and Spending Variances

For the Month Ended August 31

	Actual results	Flexible budget	Revenue and Spending variances
Pounds	7600	7600
Revenue ($4.10 q )	27100	31160	4060U
Expenses:
Packing supplies ($0.35 q )	2830	2660	170U
Oyster bed maintenance ($3600)	3460	3600	140F
Wages and salaries ($2200 + $0.45q)	6030	5620	410U
Shipping ($0.65 q )	4670	4940	270F
Utilities ($1240)	1050	1240	190F
Other ($420 + $0.01q)	1116	496	620U
Total expense	19156	18556	600U
Net operating income	7944	12604	4660U