Quilcene Oysteria farms and sells oysters in the Pacific Northwest. The company

Question

Quilcene Oysteria farms and sells oysters in the Pacific Northwest. The company harvested and sold 7,700 pounds of oysters in August. The company’s flexible budget for August appears below:

The actual results for August appear below:

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.)

Quilcene Oysteria Flexible Budget For the Month Ended August 31 Actual pounds (q) 7,700 Revenue ($4.10q) $ 31,570 Expenses: Packing supplies ($0.40q) 3,080 Oyster bed maintenance ($3,400) 3,400 Wages and salaries ($2,000 + $0.30q) 4,310 Shipping ($0.75q) 5,775 Utilities ($1,280) 1,280 Other ($430 + $0.01q) 507 Total expense 18,352 Net operating income $ 13,218

Explanation / Answer

Calculate the company’s revenue and spending variances for August.

Revenue 5070 U Expense Packing supplies 170 U Oyster bed maintenance 140 F Wages and salaries 410 U Shipping 270 F Utilities 190 F Other 620 U Total expense 600 U Net operating income 5670 U

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