Exercise 9-3 (Algo) Revenue and Spending Variances [LO9-3]

Quilcene Oysteria farms and sells oysters in the Pacific Northwest. The company harvested and sold 7,100 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)		7,100
Revenue ($4.05q)	$	28,755
Expenses:
Packing supplies ($0.35q)		2,485
Oyster bed maintenance ($3,100)		3,100
Wages and salaries ($2,600 + $0.35q)		5,085
Shipping ($0.55q)		3,905
Utilities ($1,290)		1,290
Other ($470 + $0.01q)		541
Total expense		16,406
Net operating income	$	12,349

The actual results for August were as follows:

Quilcene Oysteria
Income Statement
For the Month Ended August 31
Actual pounds		7,100
Revenue	$	26,900
Expenses:
Packing supplies		2,655
Oyster bed maintenance		2,960
Wages and salaries		5,495
Shipping		3,635
Utilities		1,100
Other		1,161
Total expense		17,006
Net operating income	$	9,894

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.)