$(8$ 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$)$:

$\backslash$table$[[,$Formula$],[$Revenue$,$$$14\mathrm{.}75$q$],[$Cost of ingredients,$$4\mathrm{.}40$q$],[$Rent$,$$$2,200],[$Utilities$,$$$300+$$$0\mathrm{.}40$q$],[$Salaries$,$$$6,000],[$Miscellaneous$,$$$500+$$$\mathrm{.}65$q$]]$

Actual results for February appear below. Prepare a flexible budget performance report for the pizzeria for February for $1,350$ pizzas.

$\backslash$table$[[$Revenue$,$$$20,100],[$Cost of ingredients,$5,820],[$Rent$,2,250],[$Utilities$,908],[$Salaries$,6,100],[$Miscellaneous$,1,350]]$

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 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.

$\backslash$table$[[$Actual Units,$\backslash$table$[[$Actual$],[$Results$]],\backslash$table$[[],[$Spending$],[$Variances$]],\backslash$table$[[$Flexible$],[$Budget$]],\backslash$table$[[$Activity$],[$Variances$]],\backslash$table$[[$Planning$],[$Budget$]]],[$Revenue$,,,,,],[$Expenses:$,,,,,],[$Cost of ingredients,,,,,$],[$Rent$,,,,,],[$Utilities$,,,,,],[$Salaries$,,,,,],[$Miscellaneous$,,,,,],[$Total expenses,,,,,$],[\backslash$table$[[$Net operating$],[$income$]],,,,,]]1.(8$ 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\mathrm{.}75$q

Cost of ingredients $$4\mathrm{.}40$q

Rent $$2,200$

Utilities $$300+$ $$0\mathrm{.}40$q

Salaries $$6,000$

Miscellaneous $$500+$ $$\mathrm{.}65$q

Actual results for February appear below. Prepare a flexible budget performance

report for the pizzeria for February for $1,350$ pizzas.

Revenue $$20,100$

Cost of ingredients $5,820$

Rent $2,250$

Utilities $908$

Salaries $6,100$

Miscellaneous $1,350$

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 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

Revenue &

Spending

Variances

Flexible

Budget

Activity

Variances

Planning

Budget

Revenue

Expenses:

Cost of ingredients

Rent

Utilities

Salaries

Miscellaneous

Total expenses

Net operating

income