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 7,900 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)		7,900
Revenue ($4.10q)	$	32,390
Expenses:
Packing supplies ($0.30q)		2,370
Oyster bed maintenance ($3,300)		3,300
Wages and salaries ($2,000 + $0.30q)		4,370
Shipping ($0.60q)		4,740
Utilities ($1,220)		1,220
Other ($450 + $0.01q)		529
Total expense		16,529
Net operating income	$	15,861

The actual results for August appear below:

Quilcene Oysteria
Income Statement
For the Month Ended August 31
Actual pounds		7,900
Revenue	$	27,200
Expenses:
Packing supplies		2,540
Oyster bed maintenance		3,160
Wages and salaries		4,780
Shipping		4,470
Utilities		1,030
Other		1,149
Total expense		17,129
Net operating income	$	10,071

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.)