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Prepare a Report Showing Revenue and Spending Variances

Olympia Bivalve farms and sells oysters in the pacific northwest.The company harvested and sold 7,000 pounds of oysters in july. The company's flexible for July appears below:
Olimpia Bivalve
flexible budget
For month ended july 31

Actual pounds(q).............................7,000
Revenue($4.20q)............................$29,400
Expenses:
packing supplies($0.40q).................2,800
oyster bed maintenance($3,600)......3,600
wages and salaries($2,540+$0.50q)..6,040
shipping($0.75q)................................5,250
utilities($1,260)...................................$1,260
Other($510+$0.05q)...........................860
Total expense......................................19,810
Net operating income...........................$9,590

The actual results for july appear below:

Olimpia Bivalve
Income statement
For month ended july 31

Actual pounds(q).............................7,000
Revenue($4.20q)............................$28,600
Expenses:
packing supplies($0.40q).................2,970
oyster bed maintenance($3,600)......3,460
wages and salaries($2,540+$0.50q)..6,450
shipping($0.75q)................................4,980
utilities($1,260)...................................$1,070
Other($510+$0.05q)...........................1,480
Total expense......................................20,410
Net operating income...........................$8,190

Required: Prepare a report showing the company's revenue and spending variances for July.

Solution Summary

The expert prepares a report showing revenues and spending variances.

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