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 $ 1.25 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 $6,500 plus $2.30 per liter of gelato sold and the actual wages for June were $21,300. Via Gelato expected to sell 6,400 liters in June, but actually sold 6,600 liters. Revenue Expenses: 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.) Raw materials Fixed Variable Element Element per Month per Liter $ 21.00 $ 5.55 $ 2.30 $ 1.10 Answer is complete but not entirely correct. Via Gelato Revenue and Spending Variances For the Month Ended June 30 $ 133,540 Wages Utilities Rent $6,500 $ 2,530 $ 3,500 $ 2,250 $ 740 Insurance Miscellaneous Total expense Net operating income XU 37,130 U 21,300 F 10,000 X U 3,500 2,250 8,790 X F 82,970 X U $50,570 X U Actual Total for June $ 133,540 $ 37,130 $ 21,300 $ 10,000 $ 3,500 $2,250 $ 8,790 None None > * * * * * * * *
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 $ 1.25 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 $6,500 plus $2.30 per liter of gelato sold and the actual wages for June were $21,300. Via Gelato expected to sell 6,400 liters in June, but actually sold 6,600 liters. Revenue Expenses: 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.) Raw materials Fixed Variable Element Element per Month per Liter $ 21.00 $ 5.55 $ 2.30 $ 1.10 Answer is complete but not entirely correct. Via Gelato Revenue and Spending Variances For the Month Ended June 30 $ 133,540 Wages Utilities Rent $6,500 $ 2,530 $ 3,500 $ 2,250 $ 740 Insurance Miscellaneous Total expense Net operating income XU 37,130 U 21,300 F 10,000 X U 3,500 2,250 8,790 X F 82,970 X U $50,570 X U Actual Total for June $ 133,540 $ 37,130 $ 21,300 $ 10,000 $ 3,500 $2,250 $ 8,790 None None > * * * * * * * *
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text: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,
ages should be $6,500 plus $2.30 per liter of gelato sold and the actual wages for June were $21,300. 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.)
Wages
Utilities
Rent
$ 6,500
$ 2,530
$ 3,500
$ 2,250
$ 740
Answer is complete but not entirely correct.
Via Gelato
Revenue and Spending Variances
For the Month Ended June 30
$
133,540
Insurance
Variable
Element
per Liter
$ 21.00
$ 5.55
$ 2.30
$ 1.10
Miscellaneous
$ 1.25
Total expense
Net operating income
Actual
Total for
June
$ 133,540
$ 37,130
$ 21,300
$ 10,000
$ 3,500
$ 2,250
$ 8,790
XU
37,130 X U
21,300 F
10,000 X U
3,500 None
2,250
None
8,790 F
82,970 X U
$50,570 X U
3 3 3 3 3 3
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