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 ($4.20q) $ 31,920 Expenses: Packing supplies ($0.25q) 1,900 Oyster bed maintenance ($3,100) 3,100 Wages and salaries ($2,200 + $0.35q) 4,860 Shipping ($0.70q) 5,320 Utilities ($1,260) 1,260 Other ($490 + $0.01q) 566 Total expense 17,006 Net operating income $ 14,914 The actual results for August appear below: Quilcene Oysteria Income Statement For the Month Ended August 31 Actual pounds 7,600 Revenue $ 27,000 Expenses: Packing supplies 2,070 Oyster bed maintenance 2,960 Wages and salaries 5,270 Shipping 5,050 Utilities 1,070 Other 1,186 Total expense 17,606 Net operating income $ 9,394

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	31920	27000	-4920	Unfavorable
Less:-Expenses
Packing Supplies	1900	2070	-170	Unfavorable
Oyster bed maintenance	3100	2960	140	Favorable
Wages & salaries	4860	5270	-410	Unfavorable
Shipping	5320	5050	270	Favorable
Utilities	1260	1070	190	Favorable
Other	566	1186	-620	Unfavorable
Total Expenses	17006	17606	-600	Unfavorable
Net Operating Income	14914	9394	-5520	Unfavorable