Olympia Bivalve farms and sells oysters in the Pacific Northwest. The company harvested and sold 7,000 pounds of oysters in July. The company’s flexible budget for July appears below:
Olympia Bivalve Flexible Budget For the Month Ended July 31 | |
Actual pounds (q) | 7,000 |
Revenue ($4.20q) | $29,400 |
Expenses: | |
Packing supplies ($0.40q) | 2,800 |
Oyster bed maintenance ($3,600) | 3,600 |
Wages and salaries ($2,540 + $0.50 q) | 6,040 |
Shipping ($0.75q) | 5,250 |
Utilities ($1 ,260) | 1,260 |
Other ($510 + $0.05q) | 860 |
Total expense | 19,810 |
Net operating income | $ 9,590 |
The actual results for July appear below:
Olympia Bivalve Income statement For the Month Ended July 31 | |
Actual pounds | 7,000 |
Revenue | $28,600 |
Expenses: | |
Packing supplies | 2,970 |
Oyster bed maintenance | 3,460 |
Wages and salaries | 6,450 |
Shipping | 4,980 |
Utilities | 1,070 |
Other | 1,480 |
Total expense | 20,410 |
Net operating income | $ 8,190 |
Required:
Prepare a report showing the company’s revenue and spending variances for July.
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