Revenue Raw materials Wages Utilities Rent Insurance Miscellaneous Revenue Expenses: Raw materials Fixed Variable Element per Element per Actual Total Month for June Via Gelato Revenue and Spending Variances For the Month Ended June 30 Wages Utilities Rent $ 7,200 $ 3,230 $ 4,200 $ 2,950 $810 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 $7,200 plus $3.00 per liter of gelato sold and the actual wages for June were $26,300. Via Gelato expected to sell 6,200 liters in June, but actually sold 6,400 liters. Insurance Miscellaneous Liter $28.00 $ 6.25 $ 3.00 $ 1.80 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.) Total expense Net operating income 1.95 $ 171,540 $ 40,530 $ 26,300 $ 15,000 $ 4,200 $2,950 $ 12,890
Revenue Raw materials Wages Utilities Rent Insurance Miscellaneous Revenue Expenses: Raw materials Fixed Variable Element per Element per Actual Total Month for June Via Gelato Revenue and Spending Variances For the Month Ended June 30 Wages Utilities Rent $ 7,200 $ 3,230 $ 4,200 $ 2,950 $810 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 $7,200 plus $3.00 per liter of gelato sold and the actual wages for June were $26,300. Via Gelato expected to sell 6,200 liters in June, but actually sold 6,400 liters. Insurance Miscellaneous Liter $28.00 $ 6.25 $ 3.00 $ 1.80 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.) Total expense Net operating income 1.95 $ 171,540 $ 40,530 $ 26,300 $ 15,000 $ 4,200 $2,950 $ 12,890
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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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Transcribed Image Text:Revenue
Raw materials
Wages
Utilities
Rent
Insurance
Miscellaneous
Revenue
Expenses:
Raw materials
Fixed
Variable
Element per Element per Actual Total
Month
for June
Via Gelato
Revenue and Spending Variances
For the Month Ended June 30
Wages
Utilities
Rent
$ 7,200
$ 3,230
$ 4,200
$ 2,950
$810
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 $7,200 plus $3.00 per liter of gelato sold and the actual wages for June were $26,300. Via Gelato expected to sell
6,200 liters in June, but actually sold 6,400 liters.
Insurance
Miscellaneous
Liter
$28.00
$ 6.25
$ 3.00
$ 1.80
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.)
Total expense
Net operating income
1.95
$ 171,540
$ 40,530
$ 26,300
$ 15,000
$ 4,200
$2,950
$ 12,890
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