Answer:
Via Gelato
Revenue and Spending Variances For the Month Ended June 30
:
Budget Actual Variances
Units sold 6,200 6,400 200 Favorable
Revenue $179,200 $171,540 $7,660 Unfavorable
Expenses
:
Raw materials $40,000 $40,530 $530 Unfavorable
Wages $26,400 $26,300 $100 Favorable
Utilities $14,750 $15,000 $250 Unfavorable
Rent $4,200 $4,200 $0 Neither
Insurance $2,950 $2,950 $0 Neither
Miscellaneous $13,290 $12,890 $400 Favorable
Total expense $101,590 $101,870 $280 Unfavorable
Net operating income $77,610 $69,670 $7,940 Unfavorable
Explanation:
a) Revenue budget = $28 x 6,400 = $179,200
b) Wages budget = $7,200 + $3.00 x 6,400 = $26,400
c) Utilities budget = $3,230 + $1.80 x 6,400 = $14,750
d) Miscellaneous = $810 + $1.95 x 6,400 = $13,290
These flexible budgets were calculated for Via Gelato since it measures its activity in terms of the total number of liters of gelato sold. To obtain variances, items are compared on like terms.
