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 7,000 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) 7,000 Revenue ($4.10q) $ 28,700 Expenses: Packing supplies ($0.35q) 2,450 Oyster bed maintenance ($3,300) 3,300 Wages and salaries ($2,200 + $0.30q) 4,300 Shipping ($0.65q) 4,550 Utilities ($1,300) 1,300 Other ($440 + $0.01q) 510 Total expense 16,410 Net operating income $ 12,290

Explanation / Answer

Actual Revenue and spending variances Flexible Budget Actual pounds (q) 7000 Revenue ($4.10q) 27100 1,600 U 28,700 Expenses: Packing supplies ($0.35q) 2620 170 U 2,450 Oyster bed maintenance ($3,300) 3160 140 F 3,300 Wages and salaries ($2,200 + $0.30q) 4710 410 U 4,300 Shipping ($0.65q) 4280 270 F 4,550 Utilities ($1,300) 1110 190 F 1,300 Other ($440 + $0.01q) 1130 620 U 510 Total expense 17010 600 U 16410 Net operating income 10090 2,200 U 12290

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