Question

Via Gelato is a popular neighborhood gelato shop. The company has provided the following data concerning its operations:

Fixed
Element
per Month

Variable
Element
per Liter

Actual
Total for
June

  Revenue

$

20.00   

$

122,540    

  Raw materials

$

5.45   

$

36,030    

  Wages

$

6,400    

$

2.20   

$

20,200    

  Utilities

$

2,430    

$

1.00   

$

9,100    

  Rent

$

3,400    

$

3,400    

  Insurance

$

2,150    

$

2,150    

  Miscellaneous

$

730    

$

1.15  

$

8,050    

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 $6,400 plus $2.20 per liter of gelato sold and the actual wages for June were $20,200. Via Gelato expected to sell 6,300 liters in June, but actually sold 6,500 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).)

Via Gelato
Revenue and Spending Variances
For the Month Ended June 30
Revenue
Expenses:
Raw materials
Wages
Utilities
Rent
Insurance
Miscellaneous
Total expense
Net operating income

Answer 1

Explanation
Via Gelato Revenue and Spending Variances For the Month Ended June 30
	Actual Results	Flexible Budget	Revenue and Spending Variances
Pounds	6500	6500
Revenue	122,540	130000	7,460	U
Expenses
Packing Supplies	36,030	35425	605	U
Oyster bed maintenance	20,200	20,700	500	F
Wages and salaries	9,100	8,930	170	U
Shipping	3,400	3,400	0	None
Utilities	2,150	2,150	0	None
Other	8,050	8,205	155	F
Total expense	78930	78810	120	U
Net operating income	43610	51190	7,580	U

Revenue

20*6500

130000

Via Gelato Revenue and Spending Variances For the Month Ended June 30
Revenue	7,460	U
Expenses
Packing Supplies	605	U
Oyster bed maintenance	500	F
Wages and salaries	170	U
Shipping	0	F
Utilities	0	F
Other	155	U
Total expense	120	U
Net operating income	7,580	U