Exercise 9-2 Prepare a Report Showing Revenue and Spending Variances [LO9-2]

Quilcene Oysteria farms and sells oysters in the Pacific Northwest. The company harvested and sold 7,800 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)		7,800
Revenue ($4.05q)	$	31,590
Expenses:
Packing supplies ($0.30q)		2,340
Oyster bed maintenance ($3,300)		3,300
Wages and salaries ($2,200 + $0.35q)		4,930
Shipping ($0.75q)		5,850
Utilities ($1,300)		1,300
Other ($450 + $0.01q)		528
Total expense		18,248
Net operating income	$	13,342

The actual results for August appear below:

Quilcene Oysteria
Income Statement
For the Month Ended August 31
Actual pounds		7,800
Revenue	$	27,500
Expenses:
Packing supplies		2,510
Oyster bed maintenance		3,160
Wages and salaries		5,340
Shipping		5,580
Utilities		1,110
Other		1,148
Total expense		18,848
Net operating income	$	8,652

Required:

Calculate 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.)

Quilcene Oysteria
Revenue and Spending Variances
For the Month Ended August 31
Revenue
Expenses:
Packing supplies
Oyster bed maintenance
Wages and salaries
Shipping
Utilities
Other
Total expense
Net operating income