Required: Calculate the company's revenue and spending variances for August. Note: Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zer variance). Input all amounts as positive values. Revenue Expenses: Quilcene Oysteria Revenue and Spending Variances For the Month Ended August 31 Packing supplies Oyster bed maintenance Wages and salaries Shipping Utilities Other

FINANCIAL ACCOUNTING
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Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Quilcene Oysteria farms and sells oysters in the Pacific Northwest. The company harvested and sold 7,300 pounds of oysters in
August. The company's flexible budget for August appears below:
Quilcene Oysteria
Flexible Budget
Actual pounds (q)
Revenue ($4.15q)
Expenses:
Packing supplies ($0.35q)
Oyster bed maintenance ($3,100)
Wages and salaries ($2,500 + $0.35q)
Shipping ($0.60q)
Utilities ($1,210)
For the Month Ended August 31
Other ($400 + $0.019)
Total expenses
Net operating income
Actual pounds
Revenue
The actual results for August were as follows:
Expenses:
Quilcene Oysteria
Income Statement
For the Month Ended August 31
Packing supplies
Oyster bed maintenance
Wages and salaries
Shipping
Utilities
Other
Total expenses
Net operating income
7,300
$ 30,295
2,555
3,100
5,055
4,380
1,210
473
16,773
$ 13,522
7,300
$ 26,600
2,725
2,960
5,465
4,110
1,020
1,093
17,373
$ 9,227
Transcribed Image Text:Quilcene Oysteria farms and sells oysters in the Pacific Northwest. The company harvested and sold 7,300 pounds of oysters in August. The company's flexible budget for August appears below: Quilcene Oysteria Flexible Budget Actual pounds (q) Revenue ($4.15q) Expenses: Packing supplies ($0.35q) Oyster bed maintenance ($3,100) Wages and salaries ($2,500 + $0.35q) Shipping ($0.60q) Utilities ($1,210) For the Month Ended August 31 Other ($400 + $0.019) Total expenses Net operating income Actual pounds Revenue The actual results for August were as follows: Expenses: Quilcene Oysteria Income Statement For the Month Ended August 31 Packing supplies Oyster bed maintenance Wages and salaries Shipping Utilities Other Total expenses Net operating income 7,300 $ 30,295 2,555 3,100 5,055 4,380 1,210 473 16,773 $ 13,522 7,300 $ 26,600 2,725 2,960 5,465 4,110 1,020 1,093 17,373 $ 9,227
Required:
Calculate the company's revenue and spending variances for August.
Note: 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.
Revenue
Expenses:
Quilcene Oysteria
Revenue and Spending Variances
For the Month Ended August 31
Packing supplies
Oyster bed maintenance
Wages and salaries
Shipping
Utilities
Other
Total expenses
Net operating income
Transcribed Image Text:Required: Calculate the company's revenue and spending variances for August. Note: 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. Revenue Expenses: Quilcene Oysteria Revenue and Spending Variances For the Month Ended August 31 Packing supplies Oyster bed maintenance Wages and salaries Shipping Utilities Other Total expenses Net operating income
Expert Solution
Step 1: Introduction:

Variance analysis is very important technique of management accounting, in which actual costs and revenues are compared with budgeted costs and revenues. Variances can be favourable or unfavourable for the organisation.The difference between budgeted result and actual result can be favorable or unfavorable. If the actual cost is higher than the budgeted cost , then it will be result in Unfavorable situation and vise a versa. If the actual revenue is higher than the budgeted revenue, then it will result in Favorable situation and vise a versa.

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