Exercise 8-2 Prepare a Report Showing Revenue and Spending Variances [LO8-2]

Quilcene Oysteria farms and sells oysters in the Pacific Northwest. The company harvested and sold 7,500 pounds of oysters in August. The companys flexible budget for August appears below: Quilcene Oysteria Flexible Budget For the Month Ended August 31 Actual pounds (q) 7,500 Revenue ($4.25q) $ 31,875 Expenses: Packing supplies ($0.35q) 2,625 Oyster bed maintenance ($3,600) 3,600 Wages and salaries ($2,000 + $0.30q) 4,250 Shipping ($0.60q) 4,500 Utilities ($1,270) 1,270 Other ($450 + $0.01q) 525 Total expense 16,770 Net operating income $ 15,105 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 2,795 Oyster bed maintenance 3,460 Wages and salaries 4,660 Shipping 4,230 Utilities 1,080 Other 1,145 Total expense 17,370 Net operating income $ 9,830 Required: Compute the companys 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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