19 Jan

Via Gelato is a popular neighborhood gelato shop

by On: Accounting - 0 Comment

Question: 10-2 Via Gelato is a popular neighborhood gelato s…

Via Gelato is a popular neighborhood gelato shop. The company has provided the following data concerning its operations:

Fixed
Element
per Month		 Variable
Element
per Liter		 Actual
Total for
June
Revenue $ 25.00 $ 151,540
Raw materials $ 5.95 $ 39,030
Wages $ 6,900 $ 2.70 $ 23,500
Utilities $ 2,930 $ 1.50 $ 13,000
Rent $ 3,900 $ 3,900
Insurance $ 2,650 $ 2,650
Miscellaneous $ 780 $ 1.65 $ 10,890

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 $6,900 plus $2.70 per liter of gelato sold and the actual wages for June were $23,500. Via Gelato expected to sell 6,200 liters in June, but actually sold 6,400 liters.

Required:

Complete the report showing 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
Revenue
Expenses:
Raw materials
Wages
Utilities
Rent
Insurance
Miscellaneous
Total expense
Net operating income  

 

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