Milano Pizza is a small neighborhood pizzeria that has a small area for in-store
ID: 2554352 • Letter: M
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:
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.)
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:
Explanation / Answer
Actual Revenue and spending variances Flexible budget Activity variances Planning budget Pizzas 2350 2350 2250 Deliveries 190 190 210 Revenue 52480 780 F 51700 2200 F 49500 Expenses: Pizza ingredients 11350 775 U 10575 450 U 10125 Kitchen staff 6310 60 F 6370 0 None 6370 Utilities 1000 1250 F 2250 60 U 2190 Delivery person 646 0 None 646 68 F 714 Delivery vehicle 1032 113 F 1145 30 F 1175 Equipment depreciation 584 0 None 584 0 None 584 Rent 2330 0 None 2330 0 None 2330 Miscellaneous 928 267 F 1195 10 U 1185 Total expenses 24180 915 F 25095 422 U 24673 Net operating income 28300 1695 F 26605 1778 F 24827