Question

Quilcene Oysteria farms and sells oysters in the Pacific Northwest. The company harvested and sold 7,100 pounds of oysters in August. The company’s flexible budget for August appears below:

Quilcene Oysteria
Flexible Budget
For the Month Ended August 31
Actual pounds (q)		7,100
Revenue ($4.15q)	$	29,465
Expenses:
Packing supplies ($0.30q)		2,130
Oyster bed maintenance ($3,400)		3,400
Wages and salaries ($2,500 + $0.40q)		5,340
Shipping ($0.70q)		4,970
Utilities ($1,250)		1,250
Other ($420 + $0.01q)		491
Total expense		17,581
Net operating income	$	11,884

The actual results for August appear below:

Quilcene Oysteria
Income Statement
For the Month Ended August 31
Actual pounds		7,100
Revenue	$	27,400
Expenses:
Packing supplies		2,300
Oyster bed maintenance		3,260
Wages and salaries		5,750
Shipping		4,700
Utilities		1,060
Other		1,111
Total expense		18,181
Net operating income	$	9,219

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.)

Answer 1