Via Gelato is a popular neighborhood gelato shop. The company has provided the following cost formulas and
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Question:
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 | $ 12.00 | $ 71,540 | |
Raw materials | $ 4.65 | $ 29,230 | |
Wages | $ 5,600 | $ 1.40 | $ 13,860 |
Utilities | $ 1,630 | $ 0.20 | $ 3,270 |
Rent | $ 2,600 | $ 2,600 | |
Insurance | $ 1,350 | $ 1,350 | |
Miscellaneous | $ 650 | $ 0.35 | $ 2,590 |
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:
Calculate Via Gelato revenue and spending variances for June.
Related Book For
Managerial Accounting
ISBN: 978-0697789938
13th Edition
Authors: Ray H. Garrison, Eric W. Noreen, Peter C. Brewer
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