Milano Pizza is a small neighborhood pizzeria that has a small area for in-store

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. Data concerning the pizzeria’s costs appear below:

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. Data concerning the pizzeria’s costs appear below:

*I already did part of it.

Fixed Cost Cost per Cost per per Month Pizza Delivery $ 4.40 Pizza ingredients Kitchen staff Utilities Delivery person Delivery vehicle Equipment depreciation Rent Miscellaneous 5,910 $ 610 $ 0.30 $ 3.10 $ 1.50 $ 630 $ 400 $1,870 $ 730 $0.15 In November, the pizzeria budgeted for 1,560 pizzas at an average selling price of $15 per pizza and for 220 deliveries. Data concerning the pizzeria's operations in November appear below: Pizzas Deliveries Revenue Pizza ingredients Kitchen staff Utilities Delivery person Delivery vehicle Equipment depreciation Rent Miscellaneous Actual Results 1,660 200 $25,450 $ 7,210 $ 5,850 $ 885 $ 620 $ 986 $ 400 $ 1,870 $ 790 Required 1. Complete the flexible budget performance report that shows both revenue and spending variances and activity variances for the pizzeria for November. (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.)

Explanation / Answer

Answer:

Millano Pizza Flexible Budget Performance Report For the month ended November 30 Actual Results Revenue and spending variances Flexible budget Activity variances Planning budget Revenue 25450 550 F 24900 1500 F 23400 Expenses: Pizza ingredients 7210 94 F 7304 440 U 6864 Kitchen staff 5850 60 F 5910 0 None 5910 Utilities 885 223 F 1108 30 U 1078 Delivery Person 620 0 None 620 62 F 682 Delivery vehicle 986 56 U 930 30 F 960 Equipment depreciation 400 0 None 400 0 None 400 Rent 1870 0 None 1870 0 None 1870 Miscellaneous 790 189 F 979 15 U 964 Total expense 18611 510 F 19121 393 U 18728 Net operating income 6839 1060 F 5779 1107 F 4672

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