Milano Pizza is a small neighborhood pizzeria that has a small area for in-store
ID: 2585346 • 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
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 Flexible Budget Performance Report For the Month Ended November 30 Actual Results Revenue and Spending Variances Flexible Budget Activity Variances Planning Budget Revenue $32,080 580 F 31500 1800 F 29700 Expenses: Pizza ingredients 7,750 475 F 8225 470 U 7755 Kitchen staff 5,910 60 F 5970 None 5970 Utilities 900 790 F 1690 60 U 1630 Delivery person 782 None 782 68 F 850 Delivery vehicle 992 82 F 1074 36 F 1110 Equipment depreciation 424 None 424 None 424 Rent 1,930 None 1930 None 1930 Miscellaneous 808 57 F 865 6 U 859 Total expense 19,496 1464 F 20960 432 U 20528 Net operating income 12584 2044 F 10540 1368 F 9172