Reference no: EM132615371

Quilcene Oysteria farms and sells oysters in the Pacific Northwest. The company harvested and sold 7,100 pounds of oysters in August. The company's flexible budget for August appears below:

Quilcene Oysteria

Flexible Budget

For the Month Ended August 31

Actual pounds (q)                7,100

Revenue ($4.25q)                  $ 30,175

Expenses:

Packing supplies ($0.30q)            2,130

Oyster bed maintenance ($3,600) 3,600

Wages and salaries ($2,100 + $0.45q) 5,295

Shipping ($0.80q)                         5,680

Utilities ($1,250)                         1,250

Other ($500 + $0.01q)                   571

Total expense                            18,526

Net operating income              $11,649

The actual results for August appear below:

Quilcene Oysteria

Income Statement

For the Month Ended August 31

Actual pounds                           7,100

Revenue                                  $26,600

Expenses:

Packing supplies                        2,300

Oyster bed maintenance                3,460

Wages and salaries                    5,705

Shipping                                 5,410

Utilities                                  1,060

Other                                    1,191

Total expense                      19,126

Net operating income              $7,474

Required:

Question 1: Calculate the company's 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.)