Milano Pizza is a small neighborhood pizzeria that has a small area for in-store
ID: 2601400 • 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 The pizzeria's cost formulas appear below Fixed Cost per Cost per Cost Pizza Delivery per Month Pizza ingredients Kitchen staff Utilities Delivery person Delivery vehicle Equipment depreciation Rent Miscellaneous $ 5.00 $6,250 $ 780 1.00 $2.80 $2.00 $ 800 $ 536 $2,210 900 $0.10 In November, the pizzeria budgeted for 2,070 pizzas at an average selling price of $16 per pizza and for 230 deliveries Data concerning the pizzeria's actual results in November appear below:Explanation / Answer
Milano Pizza
Flexible Budget Performance Report
For the month ended November 30
Actual Results Revenue & Spending Variances Flexible Budget Activity Variances Planning Budget $ $ $ Pizzas 2,170 2,070 Deliveries 210 230 Revenue 35,440 720 F 34,720 1,600 F 33,120 Expenses Pizza Ingredients 10,270 580 F 10,850 500 U 10,350 Kitchen Staff 6,190 60 F 6,250 None 6,250 Utilities 970 1,980 F 2,950 100 U 2,850 Delivery Person 588 None 588 56 F 644 Delivery Vehicle 1,020 200 F 1,220 40 F 1,260 Equipment Depreciation 536 None 536 None 536 Rent 2,210 None 2,210 None 2,210 Miscellaneous 892 225 F 1,117 10 U 1,107 Total Expense 22,676 3,045 F 25,721 514 U 25,207 Net Operating Income 12,764 3,765 F 8,999 1,086 F 7,913