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 7,400 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)		7,400
Revenue ($4.15q)	$	30,710
Expenses:
Packing supplies ($0.25q)		1,850
Oyster bed maintenance ($3,300)		3,300
Wages and salaries ($2,600 + $0.35q)		5,190
Shipping ($0.55q)		4,070
Utilities ($1,220)		1,220
Other ($430 + $0.01q)		504
Total expense		16,134
Net operating income	$	14,576

The actual results for August appear below:

Quilcene Oysteria Income Statement For the Month Ended August 31
Actual pounds		7,400
Revenue	$	26,700
Expenses:
Packing supplies		2,020
Oyster bed maintenance		3,160
Wages and salaries		5,600
Shipping		3,800
Utilities		1,030
Other		1,124
Total expense		16,734
Net operating income	$	9,966

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.)