Flexible Budgets and Revenue and Spending Variances [LO1, LO3]
Gelato Supremo 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 $4,800 plus $1.20 per liter of gelato sold, and the actual wages for July were $11,200. Gelato Supremo expected to sell 5,000 liters in July, but actually sold 4,900 liters.
Required:
Prepare a report showing Gelato Supremo revenue and spending variances for July.
EXERCISE 9–18 Flexible Budget Performance Report [LO1, LO4]
AirAssurance Corporation provides on-site air quality testing services. The company has provided the following data concerning its operations:
The company uses the number of jobs as its measure of activity. For example, mobile lab operating expenses should be $4,900 plus $29 per job, and the actual mobile lab operating expenses for March were $7,960.
The company expected to work 100 jobs in March, but actually worked 98 jobs.
Required:
Prepare a flexible budget performance report showing AirAssurance Corporation’s activity variances and revenue and spending variances for March.