Quilcene Oysteria farms and sells oysters in the Pacific Northwest. The company harvested and sold 7,500 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) 7,500 Revenue ($4.20q) $ 31,500 Expenses: Packing supplies ($0.30q) 2,250 Oyster bed maintenance ($3,200) 3,200 Wages and salaries ($2,200 + $0.40q) 5,200 Shipping ($0.60q) 4,500 Utilities ($1,210) 1,210 Other ($480 + $0.01q) 555 Total expense 16,915 Net operating income $ 14,585 The actual results for August appear below: Quilcene Oysteria Income Statement For the Month Ended August 31 Actual pounds 7,500 Revenue $ 27,200 Expenses: Packing supplies 2,420 Oyster bed maintenance 3,060 Wages and salaries 5,610 Shipping 4,230 Utilities 1,020 Other 1,175 Total expense 17,515 Net operating income $ 9,685 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.)

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

Quilcene Oysteria farms and sells oysters in the Pacific Northwest. The company harvested and sold 7,500 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)		7,500

Revenue ($4.20q)	$	31,500
Expenses:
Packing supplies ($0.30q)		2,250
Oyster bed maintenance ($3,200)		3,200
Wages and salaries ($2,200 + $0.40q)		5,200
Shipping ($0.60q)		4,500
Utilities ($1,210)		1,210
Other ($480 + $0.01q)		555
Total expense		16,915
Net operating income	$	14,585

The actual results for August appear below:

Quilcene Oysteria
Income Statement
For the Month Ended August 31
Actual pounds		7,500

Revenue	$	27,200
Expenses:
Packing supplies		2,420
Oyster bed maintenance		3,060
Wages and salaries		5,610
Shipping		4,230
Utilities		1,020
Other		1,175
Total expense		17,515
Net operating income	$	9,685

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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