Milano Pizza is a small neighborhood pizzeria that has a small area for in-store
ID: 2556737 • 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:
Data concerning the pizzeria’s operations in November 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:
In November, the pizzeria budgeted for 2,220 pizzas at an average selling price of $21 per pizza and for 200 deliveries.Data concerning the pizzeria’s operations in November appear below:
Required: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.)
Fixed Cost Cost per Cost per per Month Pizza Delivery $4.40 Pizza ingredients Kitchen staff Utilities Delivery person Delivery vehicle Equipment depreciation Rent Miscellaneous $ 6,350 $ 830 0.50 $ 3.30 $ 1.40 $ 850 $ 576 $2,310 $ 950 $ 0.25
Explanation / Answer
Millano Piza Flexible budget performance report For the month ended November 30 Actual results Revenue & Spending variances Flexible budget Activity variances Planning budget Revenue 49490 770 F 48720 2100 F 46620 Expenses Pizza Ingredients 11170 962 U 10208 440 U 9768 Kitchen staff 6290 60 F 6350 286.04 F 6636.04 Utilities 995 995 F 1990 12.61 U 1977.39 Delivery person 594 0 None 594 66.00 F 660.00 Delivery vehicles 1030 72 F 1102 66.29 F 1168.29 Equipment depreciation 576 0 None 576 25.95 F 601.95 Rent 2310 0 None 2310 104.05 F 2414.05 Miscellaneous 922 608 F 1530 17.79 F 1547.79 Total expenses 23887 773 F 24660 113.50 F 24773.50 Net operating Income 25603 1543 F 24060 2213.50 F 21846.50