1. (8 points) Pic Guys Pizzeria is owned and operated by three brothers. Data concerning the pizzeria's monthly revenues and costs appear below (q refers to the number of pizzas served): Formula Revenue $15.054 Cost of ingredients $4.904 Rent $2,050 Utilities $300 + $0.204 Salaries $6,000 Miscellaneous $500 + $0.604 Actual results for February appear below. Prepare a flexible budget performance report for the pizzeria for February for 1,300 pizzas. Revenue Cost of ingredients Rent Utilities Salaries Miscellaneous $19,400 6,500 2,050 540 6,150 1,150 Required: a. Prepare a budget for 1,200 pizzas (this is the planning budget). b. Prepare a budget for 1,300 pizzas (this is the flexible budget). c. Compute the activity variances between the two budgets and revenue/spending variances between the actual data and the flexible budget. Also indicate whether the variance is favorable or unfavorable. Actual Units Actual Results (1,300 pizzas) Revenue & Spending Variances Flexible Budget (1,300 pizzas) Activity Variances Planning Budget (1,200 pizzas) Revenue Expenses: Cost of ingredients Rent Utilities Salaries Miscellaneous Total expenses Net operating income