Streeterville Pizza is a small neighborhood pizzeria that has a small area for i
ID: 2398421 • Letter: S
Question
Streeterville Pizza is a small neighborhood pizzeria that has a small area for in-store dining as well offering takeout 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. Data concerning the pizzeria's costs appear below Cost Fixed Cost Cost pere per Month Pizza Delivery Pizza ingredients Kitchen staff Utilities Delivery person Delivery vehicle Equipment depreciation Rent Miscellaneous $5.00 $5,800 $ 520 0.10 $2.90 $2.10 680 $ 387 $1,730 730 $ 0.01 In October, the pizzeria budgeted for 2,000 pizzas at an average selling price of $13.00 per pizza and for 190 deliveries. Data concerning the pizzeria's operations in October appear below: Pizzas Deliveries Revenue Pizza ingredients Kitchen staff Utilities Delivery person Delivery vehicle Equipment depreciation Rent Miscellaneous Actual Results 2,100 190 $27,840 $ 10,550 $ 5,740 $ 855 S 551 $ 1,233 S 387 $ 1,730 $ 743Explanation / Answer
Flexible budget Actual Revenue and spending variances Revenue 27300 27840 540 F Expenses: Pizza ingredients 10500 10550 50 U Kitchen staff 5800 5740 60 F Utilities 730 855 125 U Delivery person 551 551 0 None Delivery vehicle 1079 1233 154 U Equipment depreciation 387 387 0 None Rent 1730 1730 0 None Miscellaneous 751 743 8 F Total expense 21528 21789 261 U Net operating income 5772 6051 279 F