Question

Check Quilcene Oysteria farms and sells oysters in the Pacific Northwest. The company harvested and sold 7,300 pounds of oysters in August. The company's flexible budget for August appears below: 7,300 $ 29,565 Quilcene Oysteria Flexible Budget For the Month Ended August 31 Actual pounds (9) Revenue (54.859) Expenses: Packing supplies ($0.359) Oyster bed maintenance ($3,100) Wages and salaries ($2,200 + $0.489) Shipping ($0.650) Utilities (51,240) Other ($460 + $0.019) Total expense Net operating income 2,555 3,100 5,120 4,745 1,240 533 17,293 $ 12,272

Answer 1

Revenue (3,065) U Expense Packing Supplies 170 U • Oyster bed maintenance (140) F Wages and salaries 410 U • Shipping (270) F • Utilities (190) F • Other 620 U 0 Total Expense 600 U o Net Operating Income (2,465) U

Working Note- 1- Revenue variance = 26,500-29,565 = (3,065) 2-Packing Supplies = 2,725 -2,555 = 170 3- Oyster bed maintenance = 2,960 - 3,100 = (140) 4- Wages and salaries = 5,530 - 5,120 = 410 5- Shipping = 4,475 - 4,745 = (270) 6- Utilities = 1,050-1,240=(190) 7- Other = 1,153 - 533 = 620

Special Note - If actual revenue is more than the budgeted revenue, it is favourable. If actual spending is more than the budgeted one, it is unfavourable.