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 Cost of ingredients Rent Utilities Salaries Miscellaneous $14.15q $4.60a $2,050 $300S0.15q 6,000 $500 + S.65q 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 $18,500 6,100 2,050 608 6,200 1,050 Required: a. b. c. Prepare a budget for 1,400 pizzas (this is the planning budget). Prepare a budget for 1,300 pizzas (this is the flexible budget). 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. Planning Budget Activity ActualRevenue & Flexible Results Spending BudgetVariances Actual Units Variances Revenue Expenses: Cost of ingredients Rent Utilities Salaries Miscellaneous Total expenses Net operating income