Exercise 9-3 Revenue and Spending Variances [LO9-3]

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 ($4.05q)	$	31,995
Expenses:
Packing supplies ($0.40q)		3,160
Oyster bed maintenance ($3,600)		3,600
Wages and salaries ($2,200 + $0.45q)		5,755
Shipping ($0.70q)		5,530
Utilities ($1,270)		1,270
Other ($440 + $0.01q)		519
Total expense		19,834
Net operating income	$	12,161

The actual results for August appear below:

Quilcene Oysteria
Income Statement
For the Month Ended August 31
Actual pounds		7,900
Revenue	$	26,500
Expenses:
Packing supplies		3,330
Oyster bed maintenance		3,460
Wages and salaries		6,165
Shipping		5,260
Utilities		1,080
Other		1,139
Total expense		20,434
Net operating income	$	6,066

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.)