Question

Quilcene Oysteria farms and sells oysters in the Pacific Northwest. The company harvested and sold 7,500 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)		7,500
Revenue ($4.20q)	$	31,500
Expenses:
Packing supplies ($0.40q)		3,000
Oyster bed maintenance ($3,400)		3,400
Wages and salaries ($2,100 + $0.25q)		3,975
Shipping ($0.60q)		4,500
Utilities ($1,290)		1,290
Other ($470 + $0.01q)		545
Total expense		16,710
Net operating income	$	14,790

The actual results for August appear below:

Quilcene Oysteria
Income Statement
For the Month Ended August 31
Actual pounds		7,500
Revenue	$	27,300
Expenses:
Packing supplies		3,170
Oyster bed maintenance		3,260
Wages and salaries		4,385
Shipping		4,230
Utilities		1,100
Other		1,165
Total expense		17,310
Net operating income	$	9,990

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

Required: Calculate the company's revenue and spending variances for August. Quilcene Oysteria Revenue and Spending Variances For the Month Ended August 31 Revenue $4,200 U Expenses: Packing supplies 170 U Oyster bed maintenance 140 F Wages and salaries 410 U Shipping 270 F Utilities 190 F Other 620 U Total expense 600 U Net operating income $4,800 с с с паста

Explanation: Quilcene Oysteria Revenue and Spending Variances For the Month Ended August 31 Actual Flexible Results Budget 7,500 7,500 Revenue and Spending Variances Pounds (q) $27,300 $31,500 $4,200 U Revenue ($4.20q) Expenses: Packing supplies ($0.409) Oyster bed maintenance ($3,400) Wages and salaries ($2,100 + $0.259) Shipping ($0.60) Utilities ($1,290) Other ($470 + $0.019) Total expense Net operating income 3,170 3,260 4,385 4,230 1,100 1,165 17,310 $9,990 3,000 3,400 3,975 4,500 1,290 545 16,710 $14,790 170 U 140 F 410 U 270 F 190 F 620 U 600 U $4,800 U