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 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

Complete the report showing Via Gelato revenue and spending variances for June

Actual Flexible budget Revenue and spending variance Revenue 192540 198400 5860 U Expenses : Raw material 41,930 41230 700 U Wages 28100 28680 580 F Utilities 17500 17270 230 U Rent 4600 4600 None Insurance 3350 3350 None Miscellaneous 15190 15420 230 F Total expense 110670 110550 120 U Net operating income 81870 87850 5980 U

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