Quilcene Oysteria farms and sells oysters in the Pacific Northwest. The company harvested and sold 7,100 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) 7,100 Revenue ($4.15q) $ 29,465 Expenses: Packing supplies ($0.25q) 1,775 Oyster bed maintenance ($3,600) 3,600 Wages and salaries ($2,200 + $0.30q) 4,330 Shipping ($0.60q) 4,260 Utilities ($1,250) 1,250 Other ($410 + $0.01q) 481 Total expense 15,696 Net operating income $ 13,769 The actual results for August were as follows: Quilcene Oysteria Income Statement For the Month Ended August 31 Actual pounds 7,100 Revenue $ 26,700 Expenses: Packing supplies 1,945 Oyster bed maintenance 3,460 Wages and salaries 4,740 Shipping 3,990 Utilities 1,060 Other 1,101 Total expense 16,296 Net operating income $ 10,404 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" fo
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
Quilcene Oysteria farms and sells oysters in the Pacific Northwest. The company harvested and sold 7,100 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) | 7,100 |
|---|---|
| Revenue ($4.15q) | $ 29,465 |
| Expenses: | |
| Packing supplies ($0.25q) | 1,775 |
| Oyster bed maintenance ($3,600) | 3,600 |
| Wages and salaries ($2,200 + $0.30q) | 4,330 |
| Shipping ($0.60q) | 4,260 |
| Utilities ($1,250) | 1,250 |
| Other ($410 + $0.01q) | 481 |
| Total expense | 15,696 |
| Net operating income | $ 13,769 |
The actual results for August were as follows:
| Quilcene Oysteria | |
| Income Statement | |
| For the Month Ended August 31 | |
| Actual pounds | 7,100 |
|---|---|
| Revenue | $ 26,700 |
| Expenses: | |
| Packing supplies | 1,945 |
| Oyster bed maintenance | 3,460 |
| Wages and salaries | 4,740 |
| Shipping | 3,990 |
| Utilities | 1,060 |
| Other | 1,101 |
| Total expense | 16,296 |
| Net operating income | $ 10,404 |
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.)
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