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 7,700 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) 7,700 Revenue ($4.20q) $ 32,340 Expenses: Packing supplies ($0.40q) 3,080 Oyster bed maintenance ($3,200) 3,200 Wages and salaries ($2,500 + $0.45q) 5,965 Shipping ($0.75q) 5,775 Utilities ($1,270) 1,270 Other ($490 + $0.01q) 567 Total expense 19,857 Net operating income $ 12,483

Explanation / Answer

Quilcene Oysteria Revenue and Spending Variances For the Month Ended August 31 Actual Results Flexible Budget Revenue and Spending Variances Pounds 7700 7700 Revenue ($4.20 q ) 7700*4.20 26600 32340 $        5,740 U Expenses: Packing supplies 3,250 3080 $           170 U Oyster bed maintenance 3,060 3200 $           140 F Wages and salaries 6,375 5965 $           410 U Shipping 5,505 5775 $           270 F Utilities 1,080 1270 $           190 F Other 1,187 567 $           620 U Total expense 20,457 19857 $           600 U Net operating income $ 6,143 12483 $        6,340 F

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