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 ($4.20q)	$	32,760
Expenses:
Packing supplies ($0.35q)		2,730
Oyster bed maintenance ($3,000)		3,000
Wages and salaries ($2,300 + $0.25q)		4,250
Shipping ($0.65q)		5,070
Utilities ($1,270)		1,270
Other ($400 + $0.01q)		478
Total expense		16,798
Net operating income	$	15,962

The actual results for August appear below:

Quilcene Oysteria
Income Statement
For the Month Ended August 31
Actual pounds		7,800
Revenue	$	27,200
Expenses:
Packing supplies		2,900
Oyster bed maintenance		2,860
Wages and salaries		4,660
Shipping		4,800
Utilities		1,080
Other		1,098
Total expense		17,398
Net operating income	$	9,802

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.)