Chapter 9 i 3.75 1 points Saved Milano Pizza is a small neighborhood pizzeria that has a small area for in-store dining as well as offering take-out and free home delivery services. The pizzeria's owner has determined that the shop has two major cost drivers-the number of pizzas sold and the number of deliveries made. The pizzeria's cost formulas appear below: Fixed Cost per Month Pizza ingredients Cost per Pizza $ 4.30 Cost per Delivery eBook Kitchen staff $ 6,330 Utilities $ 820 $ 0.40 # Hint Delivery person $ 840 $ 3.20 $ 1.30 Equipment depreciation Rent $ 568 $ 2,290 $ 940 $ 0.20 Print References Delivery vehicle Miscellaneous In November, the pizzeria budgeted for 2,190 pizzas at an average selling price of $20 per pizza and for 190 deliveries. Data concerning the pizzeria's actual results in November were as follows: Actual Results 2,290 Pizzas Deliveries Revenue Kitchen staff 170 $ 46,560 Pizza ingredients $ 10,990 $ 6,270 Utilities Delivery person $ 990 $ 544 Delivery vehicle Equipment depreciation Rent Miscellaneous Required: $ 1,028 $ 568 $ 2,290 $ 916 1. Complete the flexible budget performance report that shows both revenue and spending variances and activity variances for the pizzeria for November. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.) Pizzas Deliveries Actual Results 2,290 170 $ 46,560 Milano Pizza Flexible Budget Performance Report For the Month Ended November 30 Revenue and Spending Variances Flexible Budget 2,290 Planning Activity Variances Budget 170 $ 45,800 Revenue Expenses: Pizza ingredients 10,990 U 9,847 U Kitchen staff 6,270 F 6,330 None Utilities 990 F U Delivery person 544 None F Delivery vehicle 1,028 F F Equipment depreciation 568 None 568 None Rent 2,290 None 2,290 None Miscellaneous 916 F U Total expense 23,596 F 19,035 U 0 Net operating income 22,964 F 26,765 F 0 Chapter 9 2 3.75 points eBook Hint Saved The Saint Lucia Blood Bank, a private charity partly supported by government grants, is located on the Caribbean island of Saint Lucia. The blood bank has just finished its operations for September, which was a very busy month due to a powerful hurricane that hit neighboring islands causing many injuries. The hurricane largely bypassed Saint Lucia, but residents of Saint Lucia willingly donated their blood to help people on other islands. As a consequence, the blood bank collected and processed over 20% more blood than had been originally planned for the month. A report prepared by a government official comparing actual costs to budgeted costs for the blood bank appears below. Continued support from the government depends on the blood bank's ability to demonstrate control over its costs. Saint Lucia Blood Bank Cost Control Report For the Month Ended September 30 Liters of blood collected Print Medical supplies Lab tests Equipment depreciation Rent Utilities Administration References Total expense Actual Results 580 Planning Budget 460 Variances $ 10,626 $ 8,740 $ 1,886 U 6,123 5,888 235 U 4,375 4,000 375 U 1,750 1,750 0 975 875 100 U 12,879 12,314 565 U $ 36,728 $ 33,567 $ 3,161 U The managing director of the blood bank was very unhappy with this report, claiming that his costs were higher than expected due to the emergency on the neighboring islands. He also pointed out that the additional costs had been fully covered by payments from grateful recipients on the other islands. The government official who prepared the report countered that all of the figures had been submitted by the blood bank to the government; he was just pointing out that actual costs were a lot higher than promised in the budget. The following cost formulas were used to construct the planning budget: Medical supplies Lab tests Equipment depreciation Rent Utilities Administration Required: Cost Formulas $19.00q $12.80q $4,000 $1,750 $875 $10,750 $3.40q 1.Complete the flexible budget performance report for September. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.) Actual Results Saint Lucia Blood Bank Flexible Budget Performance Report For the Month Ended September 30 Revenue and Spending Variances Flexible Budget Activity Variances Planning Budget Liters of blood collected 580 580 460 Medical supplies $ 10,626 F $ 8,740 Lab tests 6,123 F U 5,888 Equipment depreciation 4,375 None 4,000 Rent 1,750 None None 1,750 Utilities 975 U None 875 Administration 12,879 12,314 Total expense $ 36,728 F $ 33,567