Milano Pizza is a small neighborhood pizzeria that has a small area for in-store
ID: 2398182 • Letter: M
Question
Milano Pizza is a small neighborhood pizzeria that has a small area for in-store dining as well as offering take-out and free home delivery services. The pizzeria's owner has determined that the shop has two major cost drivers-the number of pizzas sold and the number of deliveries made The pizzeria's cost formulas appear below Fixed Cost Cost per Cost per $ 4.80 0.70 per Month Pizza Delivery Pizza ingredients Kitchen staff Utilities Delivery person Delivery vehicle Equipment depreciation Rent Miscellaneous $5,990 $ 650 $3.50 $1.90 $ 670 432 $1,950 $ 770 0.10 In November, the pizzeria budgeted for 1,680 pizzas at an average selling price of $19 per pizza and for 180 deliveries Data concerning the pizzeria's actual results in November appear below:Explanation / Answer
Answers
Actual Revenues are less than Budgeted, or
Actual Expenses are more than Budgeted,
Actual Net Income is less than Budgeted.
Actual Revenues are more than Budgeted, or
Actual Expenses are less than Budgeted,
Actual Net Income is more than Budgeted.
Actual Results
Spending Variances
Flexible Budget
Activity Variances
Planning Budget
Pizzas
1,780
1,780
1,680
Deliveries
160
160
180
Revenues
$ 34,410.00
$ 590.00
Favourable
$ 33,820.00
$ 1,900.00
Favourable
$ 31,920.00
Expenses:
Pizza Ingrediants
$ 7,930.00
$ 614.00
Favourable
$ 8,544.00
$ 480.00
Unfavourable
$ 8,064.00
kitchen Staff
$ 5,930.00
$ 60.00
Favourable
$ 5,990.00
$ -
None
$ 5,990.00
Utilities
$ 905.00
$ 991.00
Favourable
$ 1,896.00
$ 70.00
Unfavourable
$ 1,826.00
Delivery Person
$ 560.00
$ -
None
$ 560.00
$ 70.00
Favourable
$ 630.00
Delivery Vehicle
$ 994.00
$ 20.00
Unfavourable
$ 974.00
$ 38.00
Favourable
$ 1,012.00
Equipment Depreciation
$ 432.00
$ -
None
$ 432.00
$ -
None
$ 432.00
Rent
$ 1,950.00
$ -
None
$ 1,950.00
$ -
None
$ 1,950.00
Miscellaneous
$ 814.00
$ 134.00
Favourable
$ 948.00
$ 10.00
Unfavourable
$ 938.00
Total Expenses
$ 19,515.00
$ 1,779.00
Favourable
$ 21,294.00
$ 452.00
Unfavourable
$ 20,842.00
Net Operating Income
$ 14,895.00
$ 2,369.00
Favourable
$ 12,526.00
$ 1,448.00
Favourable
$ 11,078.00
----Working for calculation of above data----
Actual Results
Flexible Budget
Planning Budget
Pizzas
1780
1780
1680
Deliveries
160
160
180
Revenues
34410
=1780*19
=1680*19
Expenses:
Pizza Ingrediants
7930
=1780*4.8
=1680*4.8
kitchen Staff
5930
5990
5990
Utilities
905
=650+(0.7*1780)
=650+(0.7*1680)
Delivery Person
560
=3.5*160
=3.5*180
Delivery Vehicle
994
=670+(1.9*160)
=670+(1.9*180)
Equipment Depreciation
432
432
432
Rent
1950
1950
1950
Miscellaneous
814
=770+(1780*0.1)
=770+(1680*0.1)
Total Expenses
Total Expenses
Total Expenses
Total Expenses
Net Operating Income
Revenues – Total expenses
Revenues – Total expenses
Revenues – Total expenses
Actual Results
Spending Variances
Flexible Budget
Activity Variances
Planning Budget
Pizzas
1,780
1,780
1,680
Deliveries
160
160
180
Revenues
$ 34,410.00
$ 590.00
Favourable
$ 33,820.00
$ 1,900.00
Favourable
$ 31,920.00
Expenses:
Pizza Ingrediants
$ 7,930.00
$ 614.00
Favourable
$ 8,544.00
$ 480.00
Unfavourable
$ 8,064.00
kitchen Staff
$ 5,930.00
$ 60.00
Favourable
$ 5,990.00
$ -
None
$ 5,990.00
Utilities
$ 905.00
$ 991.00
Favourable
$ 1,896.00
$ 70.00
Unfavourable
$ 1,826.00
Delivery Person
$ 560.00
$ -
None
$ 560.00
$ 70.00
Favourable
$ 630.00
Delivery Vehicle
$ 994.00
$ 20.00
Unfavourable
$ 974.00
$ 38.00
Favourable
$ 1,012.00
Equipment Depreciation
$ 432.00
$ -
None
$ 432.00
$ -
None
$ 432.00
Rent
$ 1,950.00
$ -
None
$ 1,950.00
$ -
None
$ 1,950.00
Miscellaneous
$ 814.00
$ 134.00
Favourable
$ 948.00
$ 10.00
Unfavourable
$ 938.00
Total Expenses
$ 19,515.00
$ 1,779.00
Favourable
$ 21,294.00
$ 452.00
Unfavourable
$ 20,842.00
Net Operating Income
$ 14,895.00
$ 2,369.00
Favourable
$ 12,526.00
$ 1,448.00
Favourable
$ 11,078.00