Question

In: Finance

Requirement 2: Revise the data in your worksheet to reflect the results for the subsequent period...

Requirement 2:

Revise the data in your worksheet to reflect the results for the subsequent period as shown below:

A

B

C

D

E

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2

3

4

5

6

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8

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10

11

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Chapter 9: Applying Excel
Data
Revenue $16.50 q
Cost of ingredients $6.25 q
Wages and salaries $10,400
Utilities $800 + $0.20 q
Rent $2,200
Miscellaneous $600 + $0.80 q
Actual results:
Revenue $29,730
Cost of ingredients $11,460
Wages and salaries $10,250
Utilities $1,155
Rent $2,200
Miscellaneous $2,085
Planning budget activity 1,700 meals served
Actual activity 1,800 meals served

a. What is the activity variance for revenue? (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance)).

b. What is the spending variance for the cost of ingredients? (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance)).

c. What is spending variance for wages and salaries? (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance)).

d. What is spending variance for total expenses? (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance)).

Solutions

Expert Solution

a.
Activity variance for revenue = ( Actual activity - Planning budget activity ) * Standard revenue per unit = ( 1800 - 1700 ) * 16.50 = 1650 F
b.
Actual cost of ingredients 11460
(-) Actual activity * Standard cost of ingredients per unit = 1800 * 6.25 = 11250
spending variance for the cost of ingredients 210 U
c.
Actual wages and salaries 10250
(-) Standard wages and salaries 10400
spending variance for wages and salaries 150 F
d.
Actual Standard cost for actual activity
Cost of ingredients 11460 11250
Wages and salaries 10250 10400
Utilities 1155 1160
Rent 2200 2200
Miscellaneous 2085 2040
Total expense 27150 27050
Actual total expense 27150
(-) Standard total cost for actual activity 27050
spending variance for total expenses 100 U

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