Quilcene Oysteria farms and sells oysters in the Pacific Northwest. The company harvested and sold 7,600 pounds
Question:
Quilcene Oysteria farms and sells oysters in the Pacific Northwest. The company harvested and sold 7,600 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) | 7,600 | |
Revenue ($4.05q) | $ | 30,780 |
Expenses: | ||
Packing supplies ($0.30q) | 2,280 | |
Oyster bed maintenance ($3,200) | 3,200 | |
Wages and salaries ($2,100 + $0.40q) | 5,140 | |
Shipping ($0.80q) | 6,080 | |
Utilities ($1,290) | 1,290 | |
Other ($430 + $0.01q) | 506 | |
Total expense | 18,496 | |
Net operating income | $ | 12,284 |
The actual results for August appear below:
Quilcene Oysteria | ||
Income Statement | ||
For the Month Ended August 31 | ||
Actual pounds | 7,600 | |
Revenue | $ | 26,800 |
Expenses: | ||
Packing supplies | 2,450 | |
Oyster bed maintenance | 3,060 | |
Wages and salaries | 5,550 | |
Shipping | 5,810 | |
Utilities | 1,100 | |
Other | 1,126 | |
Total expense | 19,096 | |
Net operating income | $ | 7,704 |
Required: 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.)
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Flight Café prepares in-flight meals for airlines in its kitchen located next to a local airport. The company’s planning budget for July appears below:
Flight Café | ||
Planning Budget | ||
For the Month Ended July 31 | ||
Budgeted meals (q) | 26,000 | |
Revenue ($4.00q) | $ | 104,000 |
Expenses: | ||
Raw materials ($2.10q) | 54,600 | |
Wages and salaries ($6,400 + $0.20q) | 11,600 | |
Utilities ($1,800 + $0.05q) | 3,100 | |
Facility rent ($3,400) | 3,400 | |
Insurance ($2,800) | 2,800 | |
Miscellaneous ($600 + $0.10q) | 3,200 | |
Total expense | 78,700 | |
Net operating income | $ | 25,300 |
In July, 27,000 meals were actually served. The company’s flexible budget for this level of activity appears below:
Flight Café | ||
Flexible Budget | ||
For the Month Ended July 31 | ||
Budgeted meals (q) | 27,000 | |
Revenue ($4.00q) | $ | 108,000 |
Expenses: | ||
Raw materials ($2.10q) | 56,700 | |
Wages and salaries ($6,400+ $0.20q) | 11,800 | |
Utilities ($1,800 + $0.05q) | 3,150 | |
Facility rent ($3,400) | 3,400 | |
Insurance ($2,800) | 2,800 | |
Miscellaneous ($600 + $0.10q) | 3,300 | |
Total expense | 81,150 | |
Net operating income | $ | 26,850 |
Required:
1. Calculate the company’s activity variances for July. (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.)
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Managerial Accounting for Managers
ISBN: 978-0073527130
2nd edition
Authors: Eric Noreen, Peter Brewer, Ray Garrison