Question

Quilcene Oysteria farms and sells oysters in the Pacific Northwest. The company harvested and sold 7,400 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)		7,400
Revenue ($4.15q)	$	30,710
Expenses:
Packing supplies ($0.25q)		1,850
Oyster bed maintenance ($3,100)		3,100
Wages and salaries ($2,200 + $0.45q)		5,530
Shipping ($0.70q)		5,180
Utilities ($1,300)		1,300
Other ($420 + $0.01q)		494
Total expense		17,454
Net operating income	$	13,256

The actual results for August appear below:

Quilcene Oysteria
Income Statement
For the Month Ended August 31
Actual pounds		7,400
Revenue	$	26,900
Expenses:
Packing supplies		2,020
Oyster bed maintenance		2,960
Wages and salaries		5,940
Shipping		4,910
Utilities		1,110
Other		1,114
Total expense		18,054
Net operating income	$	8,846

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