Gelato Supremo is a popular neighborhood gelato shop. The company has provided t
ID: 2503815 • Letter: G
Question
Gelato Supremo is a popular neighborhood gelato shop. The company has provided the following data concerning its operations:
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 $4,700 plus $1.10 per liter of gelato sold, and the actual wages for July were $10,750. Gelato Supremo expected to sell 5,100 liters in July, but actually sold 5,000 liters.
Prepare a report showing Gelato Supremo revenue and spending variances for July. (Input all amounts as positive values. Leave no cells blank - be certain to enter "0" wherever required. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance).)
FixedElement
per Month Variable
Element
per Liter Actual
Total for
July Revenue $ 13.60 $ 71,280 Raw materials $ 4.50 $ 24,420 Wages $ 4,700 $ 1.10 $ 10,750 Utilities $ 1,860 $ 0.10 $ 2,231 Rent $ 3,110 $ 3,110 Insurance $ 1,890 $ 1,890 Miscellaneous $ 550 $ 0.10 $ 1,168
Explanation / Answer
Gelato Supremo Revenue and Spending Variances For the Month Ended July 31 Flexible Actual Revenue and Spending Budget Results Variances Revenue 68000 71280 3280 F Expenses: Raw materials 22,500 24,420 1,920 U Wages 10,200 10,750 550 U Utilities 2,360 2,231 129 F Rent 3,110 3,110 0 None Insurance 1,890 1,890 0 None Miscellaneous 1,050 1,168 118 U Total expense 41,110 43,569 2,459 U Net operating income 26,890 27,711 821 F
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