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 ($0.30q)		2,220
Oyster bed maintenance ($3,400)		3,400
Wages and salaries ($2,100 + $0.50q)		5,800
Shipping ($0.75q)		5,550
Utilities ($1,210)		1,210
Other ($450 + $0.01q)		524
Total expense		18,704
Net operating income	$	12,006

The actual results for August appear below:

Quilcene Oysteria Income Statement For the Month Ended August 31
Actual pounds		7,400
Revenue	$	27,100
Expenses:
Packing supplies		2,390
Oyster bed maintenance		3,260
Wages and salaries		6,210
Shipping		5,280
Utilities		1,020
Other		1,144
Total expense		19,304
Net operating income	$	7,796

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.)