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 Pizza Delivery 4.58 per Pizza ingredients Kitchen staff Utilities Delivery person Delivery vehicle Equipment depreciation Rent Miscellaneous $6,158 738 $0.50 $3.30 $1.58 s 750 496 $2,118 850 8.2s in November, the pizzeria budgeted for 1,920 pizzas at an average selling price of $19 per pizza and for 180 deliveries Data concerning the pizzeria's actual results in November appear below Pizzas Deliveries 2,828 160 Revenue Pizza ingredients Kitchen staff Utilities Delivery person Delivery vehicle s 39,ese 9,376 6,e90 $ 945 5 528 1,010 Equipment depreciation 496 s 2,110 $ 862 Rent Miscellaneous Required

Explanation / Answer

Actual Revenue and spending variances Flexible budget Activity variances Planning budget Pizzas 2020 2020 1920 Deliveries 160 160 180 Revenue 39050 670 F 38380 1900 F 36480 Expenses: Pizza ingredients 9370 280 U 9090 450 U 8640 Kitchen staff 6090 60 F 6150 0 None 6150 Utilities 945 795 F 1740 50 U 1690 Delivery person 528 0 None 528 66 F 594 Delivery vehicle 1010 20 U 990 30 F 1020 Equipment depreciation 496 0 None 496 0 None 496 Rent 2110 0 None 2110 0 None 2110 Miscellaneous 862 493 F 1355 25 U 1330 Total expenses 21411 1048 F 22459 429 U 22030 Net operating income 17639 1718 F 15921 1471 F 14450

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