Gelato Revenue and Spending Variances Assignment
February 19th, 2020
Via Gelato is a popular neighborhood gelato shop. The company has provided the following cost formulas and actual results for the month of June:
| Fixed Element per Month |
Variable Element per Liter |
Actual Total for June |
|||||||
| Revenue | $ | 29.00 | $ | 175,540 | |||||
| Raw materials | $ | 6.35 | $ | 40,630 | |||||
| Wages | $ | 7,300 | $ | 3.10 | $ | 26,400 | |||
| Utilities | $ | 3,330 | $ | 1.90 | $ | 16,100 | |||
| Rent | $ | 4,300 | $ | 4,300 | |||||
| Insurance | $ | 3,050 | $ | 3,050 | |||||
| Miscellaneous | $ | 820 | $ | 2.05 | $ | 12,990 | |||
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 $7,300 plus $3.10 per liter of gelato sold and the actual wages for June were $26,400. Via Gelato expected to sell 6,100 liters in June but actually sold 6,300 liters.
Required:
Calculate Via Gelato revenue and spending variances for June. .
