Streeterville Pizza is a small neighborhood pizzeria that has a small area for i
ID: 2529475 • 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:
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:
Fixed Cost per Month Cost per Pizza Cost per Delivery Pizza ingredients Kitchen staff Utilities Delivery person Delivery vehicle Equipment depreciation Rent Miscellaneous $4.30 $5,890 $ 600 S0.20 $3.00 $1.40 S620 $ 392 $1,850 $ 720 $0.10 In October, the pizzeria budgeted for 1,530 pizzas at an average selling price of $14 per pizza and for 210 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 1,630 190 $23,360 $ 7,030 $ 5,830 $ 880 $ 570 $ 984 $ 392 $ 1,850 $ 784 Required 1. Compute the revenue and spending variances for the pizzeria for October. (Input all amounts as positive values. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance).) Streeterville Pizza Revenue and Spending Variances For the Month Ended October 31 Flexible Budget Actual Results Revenue and Spending Variances Revenue Expenses Pizza ingredients Kitchen staff Utilities Delivery person Delivery vehicle Equipment depreciation Rent Miscellaneous Total expense Net operating incomeExplanation / Answer
Flexible budget 1,630 190 cost Cost per amount fixed cost per pizza Delvery pizza ingredients 4.3 7009 Kitchen staff 5,890 5,890 Utilities 600 0.2 926 Delivery person 3 570 delivery vehicle 620 1.4 886 Equipment depreciation 392 392 Rent 1,850 1,850 Miscellaneous 720 0.1 883 18406 Flexible Budget Performance Report Actual results Revenue & spending Flexible Variaance budget Pizzas 1,630 1,630 Deliveries 190 190 Revenue 23,360 540 F 22820 Expenses: pizza ingredients 7,030 21 U 7009 Kitchen staff 5,830 60 F 5,890 Utilities 880 46 F 926 Delivery person 570 0 N 570 delivery vehicle 984 98 U 886 Equipment depreciation 392 0 N 392 Rent 1,850 0 N 1,850 Miscellaneous 784 99 F 883 total expense 18,320 86 F 18406 net operating income 5,040 626 F 4414