Question

Quilcene Oysteria farms and sells oysters in the Pacific Northwest. The company harvested and sold 7,600 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)		7,600
Revenue ($4.05q)	$	30,780
Expenses:
Packing supplies ($0.30q)		2,280
Oyster bed maintenance ($3,000)		3,000
Wages and salaries ($2,100 + $0.45q)		5,520
Shipping ($0.60q)		4,560
Utilities ($1,300)		1,300
Other ($470 + $0.01q)		546
Total expense		17,206
Net operating income	$	13,574

The actual results for August appear below:

Quilcene Oysteria
Income Statement
For the Month Ended August 31
Actual pounds		7,600
Revenue	$	26,600
Expenses:
Packing supplies		2,450
Oyster bed maintenance		2,860
Wages and salaries		5,930
Shipping		4,290
Utilities		1,110
Other		1,166
Total expense		17,806
Net operating income	$	8,794

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

Answer-

QUILCENE OYSTERIA FARMS
Revenue & Spending Variance
For the month ended August 31
Particulars	Flexible Budget	Actual Results	Variances	Remark
	$		$
Revenue	30780	26600	-4180	Unfavorable
Less:-Expenses
Packing Supplies	2280	2450	-170	Unfavorable
Oyster bed maintenance	3000	2860	140	Favorable
Wages & salaries	5520	5930	-410	Unfavorable
Shipping	4560	4290	270	Favorable
Utilities	1300	1110	190	Favorable
Other	546	1166	-620	Unfavorable
Total Expenses	17206	17806	-600	Unfavorable
Net Operating Income	13574	8794	-4780	Unfavorable