Exercise 9-15 (Algo) Flexible Budgets and Revenue and Spending Variances [LO9-1, LO9-3] Via Gelato is a popular neighborhood gelato shop. The company has provided the following cost formulas and actual results for the month of June: Revenue Raw materials Wages Utilities Rent Insurance Miscellaneous Fixed Element per Month $ 7,400 $3,430 $4,400 $ 3,150 $830 Variable Element per Liter $ 30.00 $6.45 $3.20 $2.00 2.15 Actual Total for June $190,540 $42,930 $ 28,400 $17,300 $4,400 $3,150 $ 14,390 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 $7,400 plus $3.20 per liter of gelato sold and the actual wages for June were $28,400. Via Gelato expected to sell 6,400 liters in June, but actually sold 6,600 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 (ie zero variance). Input all amounts as positive values.)
Exercise 9-15 (Algo) Flexible Budgets and Revenue and Spending Variances [LO9-1, LO9-3] Via Gelato is a popular neighborhood gelato shop. The company has provided the following cost formulas and actual results for the month of June: Revenue Raw materials Wages Utilities Rent Insurance Miscellaneous Fixed Element per Month $ 7,400 $3,430 $4,400 $ 3,150 $830 Variable Element per Liter $ 30.00 $6.45 $3.20 $2.00 2.15 Actual Total for June $190,540 $42,930 $ 28,400 $17,300 $4,400 $3,150 $ 14,390 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 $7,400 plus $3.20 per liter of gelato sold and the actual wages for June were $28,400. Via Gelato expected to sell 6,400 liters in June, but actually sold 6,600 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 (ie zero variance). Input all amounts as positive values.)
Chapter1: Financial Statements And Business Decisions
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Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
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![Exercise 9-15 (Algo) Flexible Budgets and Revenue and Spending Variances [LO9-1, LO9-3]
Via Gelato is a popular neighborhood gelato shop. The company has provided the
following cost formulas and actual results for the month of June:
Revenue
Raw materials
Wages
Utilities
Rent
Insurance
Miscellaneous
Revenue
Expenses:
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 $7,400 plus $3.20 per liter
of gelato sold and the actual wages for June were $28,400. Via Gelato expected to sell
6,400 liters in June, but actually sold 6,600 liters.
Raw materials
Fixed Element
per Month
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.)
Via Gelato
Revenue and Spending Variances
For the Month Ended June 30
Wages
Utilities
Rent
$ 7,400
$ 3,430
$4,400
$ 3,150
$830
Insurance
Miscellaneous
Variable
Element per Actual Total for
Liter
$30.00
$6.45
$3.20
June
$190,540
$ 2.00
$ 42,930
$28,400
$ 17,300
$4,400
$ 3,150
$ 14,390
Total expense
Net operating income
2.15](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F15a526c6-de52-4025-8530-5e7aa950042d%2F018d7379-2072-4455-bf89-4bf1cf708428%2Flylkjn5_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Exercise 9-15 (Algo) Flexible Budgets and Revenue and Spending Variances [LO9-1, LO9-3]
Via Gelato is a popular neighborhood gelato shop. The company has provided the
following cost formulas and actual results for the month of June:
Revenue
Raw materials
Wages
Utilities
Rent
Insurance
Miscellaneous
Revenue
Expenses:
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 $7,400 plus $3.20 per liter
of gelato sold and the actual wages for June were $28,400. Via Gelato expected to sell
6,400 liters in June, but actually sold 6,600 liters.
Raw materials
Fixed Element
per Month
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.)
Via Gelato
Revenue and Spending Variances
For the Month Ended June 30
Wages
Utilities
Rent
$ 7,400
$ 3,430
$4,400
$ 3,150
$830
Insurance
Miscellaneous
Variable
Element per Actual Total for
Liter
$30.00
$6.45
$3.20
June
$190,540
$ 2.00
$ 42,930
$28,400
$ 17,300
$4,400
$ 3,150
$ 14,390
Total expense
Net operating income
2.15
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