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 budget for July appears below:
Olympia Bivalve
Flexible Budget
For the 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:
Olympia Bivalve
Income Statement
For the Month Ended July 31
Actual pounds . . . . . . . . . . . . . . . . . . . . . . . . . $7,000
Revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $28,600
Expenses:
Packing supplies . . . . . . . . . . . . . . . . . . . . . .$2,970
Oyster bed maintenance. . . . . . . . . . . . . . . .$3,460
Wages and salaries . . . . . . . . . . . . . . . . . . . .$6,450
Shipping . . . . . . . . . . . . . . . . . . . . . . . . . . . . $4,980
Utilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,070
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $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.