Answer:
Quilcene Oysteria
Computation of revenue and spending variances for August:
Flexible Actual Variance
For the Month Ended August 31
Actual pounds (q) 7,200 7,200 None
Revenue ($4.20q) $30,240 27,200 $3,040 U
Expenses:
Packing supplies ($0.35q) 2,520 2,690 -170 U
Oyster bed maintenance ($3,300) 3,300 3,160 140 F
Wages and salaries ($2,000 + $0.35q) 4,520 4,930 -410 U
Shipping ($0.65q) 4,680 4,410 270 F
Utilities ($1,290) 1,290 1,100 190 F
Other ($460 + $0.01q) 532 1,152 -620 U
Total expense 16,842 17,442 -600 U
Net operating income $13,398 $9,758 -3,640 U
Explanation:
Quilcene Oysteria
's budget comparison with actual performance shows that there is an unfavorable variance of $3,640 arising from the less than impressive sales revenue and excessive spending incurred during August. The firm realized less revenue than budgeted and incurred more expenses than budgeted. The result is this unfavorable variance of $3,640.
