Quilcene Oysteria farms and sells oysters in the Pacific Northwest. The company
ID: 2565355 • Letter: Q
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. (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) 7,200 Revenue ($4.20q) $ 30,240 Expenses: Packing supplies ($0.30q) 2,160 Oyster bed maintenance ($3,100) 3,100 Wages and salaries ($2,000 + $0.45q) 5,240 Shipping ($0.80q) 5,760 Utilities ($1,290) 1,290 Other ($470 + $0.01q) 542 Total expense 18,092 Net operating income $ 12,148Explanation / Answer
Actual Revenue and spending variance Flexible budget Revenue 26,700 3,540 U 30240 Expenses: Packing supplies 2,330 170 U 2160 Oyster bed maintenance 2,960 140 F 3100 Wages and salaries 5,650 410 U 5240 Shipping 5,490 270 F 5760 Utilities 1,100 190 F 1290 Other 1,162 620 U 542 Total expense 18,692 600 U 18092 Net operating income 8008 4,140 U 12148
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