Via Gelato is a popular neighborhood gelato shop. The company has provided the f

Question

Via Gelato is a popular neighborhood gelato shop. The company has provided the following data concerning its operations: Fixed Variable Actual Element Element Total for per Month per Liter June Revenue Raw materials Wages Utilities Rent Insurance Miscellaneous $12.00 $71,540 $ 4.65 $29,230 $5,600 1.40 $13,860 $1,630 0.20 3,270 S 2,600 $ 1,350 S 650 S 0.35 2,590 2,600 1,350 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 $5,600 plus $1.40 per liter of gelato sold and the actual wages for June were $13,860. Via Gelato expected to sell 6,000 liters in June, but actually sold 6,200 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

Explanation / Answer

1.
Revenue                    $2,860 U
Expenses:        
Raw materials         400 U
Wages                        420 F
Utilities                      400 U
Rent                           0 None
Insurance                  0 None
Miscellaneous             230 F
Total expense               150 U
Net operating income $3,010 U

Explanation

                                   Flexible          actual         revenue and
                                   Budget           result          spending
                                                                                Variance
Liters                        6200                 6200

Revenue ($12.00q)$74,400         $71,540           $2,860 U Expenses:
Raw materials($4.65q) $28,830    29,230                 400 U
Wages ($5,600 + $1.40q)14,280    13,860                  420 F
Utilities ($1,630 + $0.20q)2,870     3,270                   400 U
Rent ($2,600)                     2,600      2,600                   0none                                           
Insurance ($1,350)            1,350      1,350                  0 None
Miscellaneous ($650 + $0.35q)2,820 2,590                 230 F
Total expense                      52,750       52,900               150 U   
Net operating income     $21,650         $18,640      $3,010 U

2.

                Actual       revenue     flexible   activity planning
              Result        and             budget     variance   budget
                                 Spending
Jobs (q)52                                      52                              50
Revenue
($360.00q)$18,950 $230F        $18,720   $720F     $18,000   Expenses:
Technician
wages ($6,400)6,450 50U          6,400          0              6,400
Mobile lab
operating
expenses
($2,900 +35.00q)4,530   190F      4,720          70U       4,650
Office expenses
($2600+$2.00q)3,050     346U      2,704            4U      2,700
Advertising
expenses ($970)995      25U         970               0         970
Insurance($1,680)1,680 0          1,680             0        1,680
Miscellaneous
expenses
($500 + $3.00q)465       191F       656                6U      650
Total expense17,170     40U       17,130           80U   17,050
Net operating
income             $1,780   $190F    $1,590     $640F     $950

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