Via Gelato is a popular neighborhood gelato shop. The company has provided the f

Question

Via Gelato is a popular neighborhood gelato shop. The company has provided the following cost formulas and actual results for the month of June Fixed Element Variable Element Actual Total per Liter $ 19.00 $ 5.35 $ 2.10 $ 0.90 per Month Revenue Raw materials Wages Utilities Rent Insurance Miscellaneous $ 6,300 2,330 $ 3,300 $ 2,050 $ 720 for June $111,530 $ 33,830 $ 18,900 $ 8,100 $ 3,300 $ 2,050 $ 6,900 1.05 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 $6,300 plus $2.10 per liter of gelato sold and the actual wages for June were $18,900. Via Gelato expected to sell 6,000 liters in June, but actually sold 6,200 liters. Required Calculate Via Gelato revenue and spending variances for June. (Indicate the effect of each variance by selecting "Fi" for favorable "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.)

Explanation / Answer

Calculate revenue and spending variance :

Revenue 6270 U Expenses : Raw materials 660 U Wages 420 F Utilities 190 U Rent 0 None Insurance 0 None Miscellaneous 330 F Total expense 100 U Net operating income 6370 U

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