Problem: 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.