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
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 income	$	13,154

The actual results for August appear below:

Quilcene Oysteria
Income Statement
For the Month Ended August 31
Actual pounds		7,600
Revenue	$	26,900
Expenses:
Packing supplies		2,070
Oyster bed maintenance		2,960
Wages and salaries		6,310
Shipping		5,430
Utilities		1,100
Other		1,116
Total expense		18,986
Net operating income	$	7,914

figure 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.)

	Quilcene Oysteria Revenue and Spending Variances For the Month Ended August 31 Revenue Expenses: Packing supplies Oyster bed maintenance Wages and salaries Shipping Utilities Other Total expense Net operating income

Answer 1

Quilcene Oysteria Revenue and Spending Variances For the Month Ended August 31 Revenue Expenses: Packing supplies Oyster bed maintenance Wages and salaries Shipping $4,640 U 170 U 140 F 410 U 270 F Utilities 190 F Other 620 U Total expense Net operating income 600 U $5,240 U

Explanation: Quilcene Oysteria Revenue and Spending Variances For the Month Ended August 31 Actual Flexible Revenue and Spending Variances Results Budget Pounds (q) 7,600 7,600 Revenue ($4.15q) Expenses: Packing supplies ($0.25q) Oyster bed maintenance ($3,100) Wages and salaries ($2,100 $0.50q) Shipping ($0.75q) Utilities ($1,290) Other ($420 $0.01q) Total expense Net operating income $26,900 $31,540 $4,640 U 2,070 2,960 6,310 5,430 1,100 1,116 18,986 $7,914 170 U 140 F 410 U 270 F 1,900 3,100 5,900 5,700 1,290 190 F 620 U 600 U $5,240 U 496 18,386 $13,154