Via Gelato is concerning its operations: a popular neighborhood gelato shop. The
ID: 2565613 • Letter: V
Question
Via Gelato is concerning its operations: a popular neighborhood gelato shop. The company has pro vided the following data Fixed Variable Actual Element Element Total for per Month per Liter Revenue Raw materials Wages Utilities Rent Insurance Miscellaneous $25.00 $151,540 $ 5.95 39,030 $6,900 2.70 23,500 $2,930 1.50 13,000 $ 3,900 $ 2,650 $ 780 1.65 10,890 $3,900 $2,650 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 $6,900 plus $2.70 per liter of gelato sold and the actual wages for June were $23,500. 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).)Explanation / Answer
Particulars
Variances
Revenue
8460
Unfavourable
Expenses
Raw Material
950
Unfavourable
Wages
680
Favourable
Utilities
470
Unfavourable
Rent
0
None
Insurance
0
None
Miscellaneous
450
Favourable
Total Expense
290
Unfavourable
Net Operating Income
8750
Unfavourable
Flexible Budget For 6400 Litres
Actual for 6400 Litres
Variances
Revenue
160000
151540
8460
Unfavourable
Expenses
Raw Material
38080
(6400*5.95)
39030
950
Unfavourable
Wages
24180
[(6400*2.70)+6900]
23500
680
Favourable
Utilities
12530
[(6400*1.50)+2930]
13000
470
Unfavourable
Rent
3900
3900
0
None
Insurance
2650
2650
0
None
Miscellaneous
11340
[(6400*1.65)+780]
10890
450
Favourable
Total Expense
92680
92970
290
Unfavourable
Net Operating Income
67320
58570
8750
Unfavourable
Particulars
Variances
Revenue
8460
Unfavourable
Expenses
Raw Material
950
Unfavourable
Wages
680
Favourable
Utilities
470
Unfavourable
Rent
0
None
Insurance
0
None
Miscellaneous
450
Favourable
Total Expense
290
Unfavourable
Net Operating Income
8750
Unfavourable
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.