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 8,000 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) 8,000 Revenue ($4.25q) $ 34,000 Expenses: Packing supplies ($0.40q) 3,200 Oyster bed maintenance ($3,100) 3,100 Wages and salaries ($2,100 + $0.50q) 6,100 Shipping ($0.55q) 4,400 Utilities ($1,230) 1,230 Other ($500 + $0.01q) 580 Total expense 18,610 Net operating income $ 15,390

Explanation / Answer

ANS

QUILCENE OYSTERIA

REVENUE AND SPENDING VARIANCES

FOR THE MONTH ENDED AUGUST 31

REVENUE 7400 U EXPENSES: PACKING SUPPLIES 170 U OYSTER BED SALARIES 140 F WAGES AND SALARIES 410 U SHIPPING 270 F UTILITIES 190 F OTHER 620 U TOTAL EXPENSE 600 U NET OPERATING INCOME 8000 U

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