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 7,100 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) 7,100 Revenue ($4.15q) $ 29,465 Expenses: Packing supplies ($0.30q) 2,130 Oyster bed maintenance ($3,500) 3,500 Wages and salaries ($2,300 + $0.40q) 5,140 Shipping ($0.75q) 5,325 Utilities ($1,300) 1,300 Other ($410 + $0.01q) 481 Total expense 17,876 Net operating income $ 11,589

Explanation / Answer

Revenue and spending variance :

Revenue 2165 U Expenses 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 2765 U

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