Question

Quilcene Oysteria farms and sells oysters in the Pacific Northwest. The company harvested and sold 8,000 pounds of oysters in August. The company's flexible budget for August appears below: page 427 The actual results for August were as follows: The actual results for August were as follows: Required: Calculate the company's revenue and spending variances for August. (Hint: Refer to Exhibit 9-7.)

Answer 1

The revenue variance for August is -$8,000 and the spending variance is $2,000 for Quilcene Oysteria.

Step-by-step explanation:

To calculate the revenue variance for Quilcene Oysteria in August, we need to compare the actual revenue to the flexible budget revenue. The formula for revenue variance is actual revenue minus flexible budget revenue. In this case, the actual revenue is $64,000 (8,000 pounds of oysters sold at $8 per pound) and the flexible budget revenue is $72,000 (9,000 pounds of oysters budgeted to be sold at $8 per pound).

The revenue variance is calculated as $64,000 - $72,000 = -$8,000. A negative variance means that the actual revenue is lower than the budgeted revenue.

To calculate the spending variance, we need to compare the actual spending to the flexible budget spending. The formula for spending variance is actual spending minus flexible budget spending. In this case, the actual spending is $50,000 and the flexible budget spending is $48,000.

The spending variance is calculated as $50,000 - $48,000 = $2,000. A positive variance means that the actual spending is higher than the budgeted spending.

Answer 2

Revenue and spending variances are calculations used to measure financial performance against the budget, but specific figures for actual results in August are needed for precise calculations.

Step-by-step explanation:

The question pertains to the calculation of revenue and spending variances for Quilcene Oysteria, which is a business operation involved in the farming and selling of oysters. Revenue and spending variances analyze the difference between what was actually earned and spent versus what was budgeted. The calculation of these variances is crucial for businesses to understand their financial performance and to identify areas where they may need to adjust their operations or strategies.

Although specific numbers for the actual results in August are not provided in the question, the calculation method typically involves taking the actual revenue and subtracting the budgeted revenue to get the revenue variance. Similarly, for the spending variance, you would subtract the actual spending from the budgeted spending. Positive variances indicate better than expected performance, whereas negative variances indicate worse than expected performance.