16)

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				$	20.00		$	122,540
Raw materials				$	5.45		$	36,030
Wages	$	6,400		$	2.20		$	20,200
Utilities	$	2,430		$	1.00		$	9,100
Rent	$	3,400					$	3,400
Insurance	$	2,150					$	2,150
Miscellaneous	$	730		$	1.15		$	8,050

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 $6,400 plus $2.20 per liter of gelato sold and the actual wages for June were $20,200. Via Gelato expected to sell 6,300 liters in June, but actually sold 6,500 liters.

Required:

Calculate Via Gelato revenue and spending variances for June. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.)

Via Gelato
Revenue and Spending Variances
For the Month Ended June 30
Revenue	$7,460	U
Expenses:
Raw materials	605	U
Wages	500	F
Utilities	170	U
Rent	0	None
Insurance	0	None
Miscellaneous	155	F
Total expense		U
Net operating income		U

17)

The Gourmand Cooking School runs short cooking courses at its small campus. Management has identified two cost drivers it uses in its budgeting and performance reportsthe number of courses and the total number of students. For example, the school might run two courses in a month and have a total of 60 students enrolled in those two courses. Data concerning the companys cost formulas appear below:

	Fixed Cost per Month		Cost per Course		Cost per Student
Instructor wages			$	2,950
Classroom supplies					$	300
Utilities	$	1,220	$	60
Campus rent	$	4,700
Insurance	$	2,200
Administrative expenses	$	3,900	$	41	$	6

For example, administrative expenses should be $3,900 per month plus $41 per course plus $6 per student. The companys sales should average $860 per student.

The company planned to run four courses with a total of 60 students; however, it actually ran four courses with a total of only 52 students. The actual operating results for September appear below:

	Actual
Revenue	$	48,700
Instructor wages	$	11,080
Classroom supplies	$	17,850
Utilities	$	1,870
Campus rent	$	4,700
Insurance	$	2,340
Administrative expenses	$	3,850

Required:

Prepare a flexible budget performance report that shows both revenue and spending variances and activity variances for September. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.)

(Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.)

Gourmand Cooking School
Flexible Budget Performance Report
For the Month Ended September 30
	Actual Results			Flexible Budget			Planning Budget
Courses	4
Students	52
Revenue	$48,700
Expenses:
Instructor wages	11,080
Classroom supplies	17,850
Utilities	1,870
Campus rent	4,700
Insurance	2,340
Administrative expenses	3,850
Total expense	41,690
Net operating income	$7,010