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 7,200 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.

Quilcene Oysteria Flexible Budget For the Month Ended August 31 Actual pounds (q) 7,200 Revenue ($4.05q) $ 29,160 Expenses: Packing supplies ($0.35q) 2,520 Oyster bed maintenance ($3,500) 3,500 Wages and salaries ($2,000 + $0.25q) 3,800 Shipping ($0.65q) 4,680 Utilities ($1,260) 1,260 Other ($460 + $0.01q) 532 Total expense 16,292 Net operating income $ 12,868

Explanation / Answer

Quilcene Oysteria Income Statement For the Month Ended August 31 Actual Revenue and spending variances Flexible budget Actual pounds 7,200 7,200 Revenue 26,800 2,360 U 29,160 Expenses: Packing supplies 2,690 170 U 2,520 Oyster bed maintenance 3,360 140 F 3,500 Wages and salaries 4,210 410 U 3,800 Shipping 4,410 270 F 4,680 Utilities 1,070 190 F 1,260 Other 1,152 620 U 532 Total expense 16,892 600 U 16,292 Net operating income 9,908 2,960 U 12,868

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