Exercise 8-15 Flexible Budgets and Revenue and Spending Variances [LO8-1, LO8-2]

Question

Exercise 8-15 Flexible Budgets and Revenue and Spending Variances [LO8-1, LO8-2] Via Gelato is a popular neighborhood gelato shop. The company has provided the following data Fixed VariableActual Element ElementTotal for per Month per LiterJune Revenue Raw materials Wages Utilities Rent Insurance Miscellaneous $18.00$110,530 s 5.25 S 33,730 $ 6,200 $ 2.00S 18,900 $2,230 $ 0.80S 7.550 $ 3,200 $ 1,950 S 710$ 0.95 $ 6,670 $3,200 $1,950 While gelato is sold by the cone or cup, the shop measures its activity in terms of the total number of liters of gelato sold. For example, wages should be $6,200 plus $2.00 per liter of gelato sold and the actual wages for June were $18,900. Via Gelato expected to sell 6,200 liters in June, but actually sold 6,400 liters. Required Complete the report showing Via Gelato revenue and spending variances for June. (Input all amounts as positive values. Indicate the effect of each variance by selecting "F" for favorable, U for unfavorable, and "None" for no effect (i.e., zero variance.) Via Gelato Revenue and Spending Variances For the Month Ended June 30

Explanation / Answer

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Via Gelato Revenue and Spending Variances For the Month Ended June 30 Actual Revenue and Spending Variance Flexible Budget Sales (liters) 6400 6200 Revenue 110530 1070 U 111600 Raw materials 33730 1180 U 32550 Wages 18900 300 U 18600 Utilities 7550 360 U 7190 Rent expense 3200 0 None 3200 Insurance 1950 0 None 1950 Miscellaneous 6670 5960 U 710

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