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 data concerning its operations: 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 $7,100 plus $2.90 per liter of gelato sold and the actual wages for June were $24,900. Via Gelato expected to sell 6,000 liters in June, but actually sold 6,200 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).)

Explanation / Answer

Budget has been reframed at 6200 units output , considering above factors( Refer wroking notes below)

Working Note on Reframed Budget

Revenue = 6200 x 27, = 167400

Raw Material = 6200 x 6.15 , =38130

Wages = 7100 + 6200 x 2.9, = 25080

Utilities = 3130 + 6200 x 1.7, =13670

Rent = 4100 ( Fixed)

Insurance = 2850 ( Fixed)

Misc. = 800 + 6200 x 1.85, = 12270

Budget Actual Variance Revenue 167400 160540 6860 U Expense Raw material 38130 38430 300 U Wages 25080 24900 180 F Utilities 13670 14200 530 U Rent 4100 4100 0 None Insurance 2850 2850 0 None Misc. 12270 11790 480 F Total expense 96100 96270 Net operating income 71300 64270 7030 U

Related Questions

Navigate

• Browse (All)
• Browse V
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.