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 The pizzeria's cost formulas appear below Fixed Cost per Cost per Cost per Month Pizza Delivery 5.00 0.90 Pizza ingredients Kitchen staff Utilities Delivery pers Delivery vehicle Equipment depreciation Rent Miscellaneous $6,030 $ 670 $2.70 $2.10 on $690 $ 448 $1,990 $ 790 $ 0.15 In November, the pizzeria budgeted for 1,740 pizzas at an average selling price of $13 per pizza and for 200 deliveries

Explanation / Answer

Actual Revenue and spending variances Flexible budget Activity variances Planning budget Pizzas 1840 1840 1740 Deliveries 180 180 200 Revenue 24530 610 F 23920 1300 F 22620 Expenses: Pizza ingredients 8390 810 F 9200 500 U 8700 Kitchen staff 5970 60 F 6030 0 None 6030 Utilities 915 1411 F 2326 90 U 2236 Delivery person 486 0 None 486 54 F 540 Delivery vehicle 998 70 F 1068 42 F 1110 Equipment depreciation 448 0 None 448 0 None 448 Rent 1990 0 None 1990 0 None 1990 Miscellaneous 826 240 F 1066 15 U 1051 Total expense 20023 2591 F 22614 509 U 22105 Net operating income 4507 3201 F 1306 791 F 515

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