Question

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:

Quilcene Oysteria
Flexible Budget
For the Month Ended August 31
Actual pounds (q)		7,300
Revenue ($4.10q)	$	29,930
Expenses:
Packing supplies ($0.40q)		2,920
Oyster bed maintenance ($3,200)		3,200
Wages and salaries ($2,100 + $0.40q)		5,020
Shipping ($0.75q)		5,475
Utilities ($1,280)		1,280
Other ($500 + $0.01q)		573
Total expense		18,468
Net operating income	$	11,462

The actual results for August were as follows:

Quilcene Oysteria
Income Statement
For the Month Ended August 31
Actual pounds		7,300
Revenue	$	27,200
Expenses:
Packing supplies		3,090
Oyster bed maintenance		3,060
Wages and salaries		5,430
Shipping		5,205
Utilities		1,090
Other		1,193
Total expense		19,068
Net operating income	$	8,132

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