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. Vla Gelato expected to sell 6,400 liters In June, but actually sold 6,600 liters. Revenue Expenses: Fixed Variable Element Element per Actual Total per Month Liter for June $ 21.00 $ 133,540 $ 5.55 $ 37,130 $ 2.30 $ 1.10 Required: Calculate Via Gelato revenue and spending variances for June. (Indicate the effect of each varlance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (l.e., zero variance). Input all amounts as positive values.) Raw materials 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 Insurance Miscellaneous Total expense Net operating income SOU $ 0X U 0X F 0X U 0 0 0X F 0x U 0X U $ 21,300 $ 10,000 $ 3,500 $2,250 $ 8,790 None None ✔ ●●444666
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. Vla Gelato expected to sell 6,400 liters In June, but actually sold 6,600 liters. Revenue Expenses: Fixed Variable Element Element per Actual Total per Month Liter for June $ 21.00 $ 133,540 $ 5.55 $ 37,130 $ 2.30 $ 1.10 Required: Calculate Via Gelato revenue and spending variances for June. (Indicate the effect of each varlance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (l.e., zero variance). Input all amounts as positive values.) Raw materials 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 Insurance Miscellaneous Total expense Net operating income SOU $ 0X U 0X F 0X U 0 0 0X F 0x U 0X U $ 21,300 $ 10,000 $ 3,500 $2,250 $ 8,790 None None ✔ ●●444666
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:
Fixed
Element
per Month
Raw materials
Wages
Utilities
Rent
$ 6,500
$ 2,530
$3,500
$2,250
$ 740
Insurance
Miscellaneous
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.
Total expense
Net operating income
Variable
Element per Actual Total
Liter
for June
$ 21.00
$ 133,540
$ 5.55
$ 37,130
$ 21,300
$ 10,000
Required:
Calculate Via Gelato revenue and spending variances for June. (Indicate the effect of each varlance by selecting "F" for favorable,
"U" for unfavorable, and "None" for no effect (l.e., zero varlance). Input all amounts as positive values.)
$ 2.30
$ 1.10
> Answer is complete but not entirely correct.
Via Gelato
Revenue and Spending Variances
For the Month Ended June 30
$
0X U
$1.25
$
$ 3,500
$ 2,250
$8,790
0X U
0X
F
0X U
0✔ None
0 None
0x F
0 X U
0X U
› › › › › › › ›
Expert Solution
Step 1
Variance is difference between actual data and planned data. Variance can be for revenue or for expenses as well. In variances analysis each variance can be favourable or Unfavourable.
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