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:

  

In November, the pizzeria budgeted for 2,130 pizzas at an average selling price of $18 per pizza and for 250 deliveries.

Data concerning the pizzeria’s actual results in November appear below:

  

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.)

Thanks for your help!

Fixed Cost
per Month Cost per
Pizza Cost per
Delivery Pizza ingredients $ 4.10 Kitchen staff $ 6,290 Utilities $ 800 $ 0.20 Delivery person $ 3.00 Delivery vehicle $ 820 $ 2.20 Equipment depreciation $ 552 Rent $ 2,250 Miscellaneous $ 920 $ 0.10 CSecure httpnewconnectmheducstion.com/fow/connect.htm Ch. 9: Homework Help Save&Exit; Submit Check my work Delivery nernn Delivery vehirl pont 1 Camplrte the flexible budgrt performanre report that shows both revnur and spending vaances and artivity warinnres for the onene for November. (Indicete the effect of eech variance by selecting ?, for favorable, "U" for unfevoreble, end "None" for no effect (i.e., zero varlarice). Input all an ounts a positve values.) Flexible Budget Performance Report Enced Noember 30 Actual Flexible 2,230 10,880 10,530 Delivery person Delivery velid Equipmant depreciation 690 1.021 Nel opng O lype hene to search

Explanation / Answer

Milano Pizza Flexible Budget Performance Report For the Month Ended November 30 Actual Results Revenue and spending variances Flexible Budget Activity variances Planning Budget Pizzas 2,230 2,230 2,130 Deliveries 230 230 250 Revenue $40,880 $740 F 40140 1800 F 38340 Expenses: Pizza ingredients 10,630 1,487 U 9143 410 U 8733 Kitchen staff 6,230 60 F 6290 0 None 6290 Utilities 980 266 F 1246 20 U 1226 Delivery person 690 0 None 690 60 F 750 Delivery vehicle 1,024 302 F 1326 44 F 1370 Equipment depreciation 552 0 None 552 0 None 552 Rent 2,250 0 None 2250 0 None 2250 Miscellaneous 904 239 F 1143 10 U 1133 Total expense 23,260 620 U 22,640 336 U 22,304 Net operating income $17,620 120 F $17,500 1464 F $16,036

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