Via Gelato is a popular neighborhood gelato shop The company

Via Gelato is a popular neighborhood gelato shop. The company has provided the following data concerning its operations:

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 $6,600 plus $2.40 per liter of gelato sold and the actual wages for June were $21,000. Via Gelato expected to sell 6,000 liters in June, but actually sold 6,200 liters.

Via Gelato is a popular neighborhood gelato shop. The company has provided the following data concerning its operations:

Required: 1. What is the amount of revenue that would be included in the flexible budget for Via Gelato in June? Flex Budget Revenue 2. What is the total amount of fixed expense per month in Via Gelato\'s flexible budget? Total Fixed Expense in Budget 3. What is the variable expense per liter in Via Gelato\'s flexible budget for all expense lines combined? What is the total variable expense for the month in Via Gelato\'s flexible budget? Total Variable Expense Per Liter x Actual Liters Total Flex Budget Variable Expense

Solution

1) Flexible budget revenue = 6200*22 = $136400

2) Total fixed expense in budget = $15930

3)

4) Calculate flexible budget net operating income

5) Actual net operating income = 48570

6) Overall revenue and spending variance = 54750-48570 = 6180 U

Total variable expense per liter	10.60
*Actual liter	6200
Total flexible budget variable expense	65720