60.1K

Verified Solution

Link Copied!

Gelato Supremo 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 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

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.

Required:

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).)

Gelato Supremo Revenue and Spending Variances For the Month Ended July 31
	Flexible Budget	Actual Results	Revenue and Spending Variances
Revenue	$	$	$
Expenses:
Raw materials
Wages
Utilities
Rent
Insurance
Miscellaneous
Total expense
Net operating income	$	$	$

Answer & Explanation Solved by verified expert

See Answer