Question

# Via Gelato is a popular neighborhood gelato shop. The company has provided the following cost formulas...

Via Gelato is a popular neighborhood gelato shop. The company has provided the following cost formulas and actual results for the month of June:

 Fixed Element per Month Variable Element per Liter Actual Total for June Revenue \$ 23.00 \$ 140,540 Raw materials \$ 5.75 \$ 37,030 Wages \$ 6,700 \$ 2.50 \$ 21,800 Utilities \$ 2,730 \$ 1.30 \$ 11,600 Rent \$ 3,700 \$ 3,700 Insurance \$ 2,450 \$ 2,450 Miscellaneous \$ 760 \$ 1.45 \$ 9,390

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 \$6,700 plus \$2.50 per liter of gelato sold and the actual wages for June were \$21,800. Via Gelato expected to sell 6,100 liters in June, but actually sold 6,300 liters.

Required:

Calculate Via Gelato revenue and spending variances for June. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.)

 Flexible Fixed Variable budget component component no of jobs 6,300 Revenue 23 144900 Raw materials 5.75 36,225 Wages 6,700 2.5 22450 utilities 2,730 1.3 10920 rent 3,700 3,700 insurance 2,450 2,450 miscellanoeus expense 760 1.45 9895 total expense 16340 11.00 85,640 Actual Revenue & spending Flexible budget variance budget 6,300 6,300 Revenue 140,540 4,360 U 144900 less:Exoenses Raw materials 37,030 805 U 36,225 Wages 21,800 650 F 22450 utilities 11,600 680 U 10920 rent 3,700 0 U 3,700 insurance 2,450 0 N 2,450 miscellanoeus expense 9,390 505 F 9895 total expense 85,970 330 U 85,640 Net operating income 54,570 4,690 U 59,260

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