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 7,200 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)		7,200
Revenue ($4.20q)	$	30,240
Expenses:
Packing supplies ($0.35q)		2,520
Oyster bed maintenance ($3,600)		3,600
Wages and salaries ($2,100 + $0.30q)		4,260
Shipping ($0.65q)		4,680
Utilities ($1,300)		1,300
Other ($490 + $0.01q)		562
Total expense		16,922
Net operating income	$	13,318

The actual results for August appear below:

Quilcene Oysteria
Income Statement
For the Month Ended August 31
Actual pounds		7,200
Revenue	$	26,600
Expenses:
Packing supplies		2,690
Oyster bed maintenance		3,460
Wages and salaries		4,670
Shipping		4,410
Utilities		1,110
Other		1,182
Total expense		17,522
Net operating income	$	9,078

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.)