1. (8 points) Pie 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 $14.75q Cost of ingredients $4.40q Rent $2,200 Utilities $300 + $0.40q Salaries $6,000 $500+ $.65q Miscellaneous Actual results for February appear below. Prepare a flexible budget performance report for the pizzeria for February for 1,350 pizzas. Revenue Cost of ingredients Rent Utilities Salaries $20,100 5,820 2,250 908 6,100 1,350 Miscellaneous Required: a. Prepare a budget for 1,250 pizzas (this is the planning budget). b. Prepare a budget for 1,350 pizzas (this is the flexible budgery 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 Revenue Expenses: Cost of ingredients Rent Utilities Salaries Miscellaneous Total expenses Net operating income Actual Results Revenue & Spending Flexible Budget Activity Variances Planning Budget Variances