Via Gelato is a popular neighborhood gelato shop. The company has provided the f
ID: 2519379 • Letter: V
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 $7,600 plus $3.40 per liter of gelato sold and the actual wages for June were $28,100. Via Gelato expected to sell 6,000 liters in June, but actually sold 6,200 liters.
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 is a popular neighborhood gelato shop. The company has provided the following data concerning its operations:
Explanation / Answer
Answer
Fixed Cost (A)
Variable cost per litre (B)
Total Variable cost for 6200 litres (C=6200 x B)
Total cost for 6200 litres [Flexible Budget] (D=A+C)
Actual cost for 6200 litres (E)
Spending Variance
Raw materials
$ 6.65
$ 41,230.00
$ 41,230.00
$ 41,930.00
700
Unfavourable
Wages
$ 7,600.00
$ 3.40
$ 21,080.00
$ 28,680.00
$ 28,100.00
580
Favourable
Utilities
$ 3,630.00
$ 2.20
$ 13,640.00
$ 17,270.00
$ 17,500.00
230
Unfavourable
Rent
$ 4,600.00
$ -
$ 4,600.00
$ 4,600.00
0
None
Insurance
$ 3,350.00
$ -
$ 3,350.00
$ 3,350.00
0
None
Miscellaneous
$ 850.00
$ 2.35
$ 14,570.00
$ 15,420.00
$ 15,190.00
230
Favourable
Budgeted Revenue for 6200 litres
Actual Revenue
Revenue Variance
$198,400 [6200 x $32]
$192,540
5860 Unfavourable
Fixed Cost (A)
Variable cost per litre (B)
Total Variable cost for 6200 litres (C=6200 x B)
Total cost for 6200 litres [Flexible Budget] (D=A+C)
Actual cost for 6200 litres (E)
Spending Variance
Raw materials
$ 6.65
$ 41,230.00
$ 41,230.00
$ 41,930.00
700
Unfavourable
Wages
$ 7,600.00
$ 3.40
$ 21,080.00
$ 28,680.00
$ 28,100.00
580
Favourable
Utilities
$ 3,630.00
$ 2.20
$ 13,640.00
$ 17,270.00
$ 17,500.00
230
Unfavourable
Rent
$ 4,600.00
$ -
$ 4,600.00
$ 4,600.00
0
None
Insurance
$ 3,350.00
$ -
$ 3,350.00
$ 3,350.00
0
None
Miscellaneous
$ 850.00
$ 2.35
$ 14,570.00
$ 15,420.00
$ 15,190.00
230
Favourable
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