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:
Quilcene Oysteria
Flexible Budget
For the Month Ended August 31

Actual pounds (q) . 8,000
Revenue ($4.00q) . 32,000
Expenses:
Packing supplies ($0.50q) . 4,000
Oyster bed maintenance ($3,200) . 3,200
Wages and salaries ($2,900 + $0.30q) . 5,300
Shipping ($0.80q) . 6,400
Utilities ($830) . 830
Other ($450 + $0.05q) . 850
Total expense . 20,580
Net operating income . 11,420

The actual results for August appear below:

Quilcene Oysteria
Income Statement
For the Month Ended August 31
Actual pounds . 8000
Revenue .35,200
Expenses:
Packing supplies . 4200
Oyster bed maintenance .3100
Wages and salaries .5640
Shipping .6950
Utilities .810
Other .980
Total expense .21,680
Net operating income .13,520

Required:
Prepare a report showing the company's revenue and spending variances for August.

Explanation / Answer

ACTIVITY VARIANCES Flexible Actual Variances Actual (q) 8000 8000 0 Revenue($4.50q) 32000 35200 3200F Expenses: Packing Supplies 4000 4200 200U Oyster Maintenance 3200 3100 100F Wages and Salaries($5200÷0.30) 5300 5640 340U Shipping 6400 6950 550U Utilities($2400÷0.05) 830 810 20F Other 850 980 130U Total Expense 20580 21680 1100U Net Income 11420 13520 2100F

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