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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
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): Revenue Cost of ingredients Rent Utilities Salaries Formula $15.05q $4.90q $2,050 $300 + $0.20q $6,000 Miscellaneous $500+ $0.60q 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 $19,400 6,500 2,050 540 Salaries Miscellaneous Required: 6,150 1,150. 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
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