Question
Milano Pizza has a small area for in-store dining as well as offers take-out and free home delivery services. The pizzeria's owner determined the
Milano Pizza has a small area for in-store dining as well as offers take-out and free home delivery services. The pizzeria's owner determined 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 Cost per Pizza ingredients Pizza $ 4.00 Cost per Delivery Kitchen staff Utilities $ 6,050 $ 680 $ 1.00 Delivery person Delivery vehicle $ 700 $ 2.80 $ 2.20 Equipment depreciation Rent $ 456 $ 2,010 Miscellaneous $ 800 $ 0.20 In November, the pizzeria budgeted for 1,770 pizzas at an average selling price of $14 per pizza and for 210 deliveries. Data concerning the pizzeria's actual results in November were as follows: Actual Results 1,870 Pizzas Deliveries Revenue Pizza ingredients Kitchen staff 190 $ 26,800 $ 8,470 $ 5,990 Utilities Delivery person Delivery vehicle Equipment depreciation Rent Miscellaneous Required: $ 920 $ 532 $ 1,000 $ 456 $ 2,010 $ 832 1. Complete the flexible budget performance report for November. Note: 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. Required: 1. Complete the flexible budget performance report for November. Note: 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 1,870 190 $ 26,800 Milano Pizza Flexible Budget Performance Report For the Month Ended November 30 Flexible Budget Planning Budget Revenue Expenses: Pizza ingredients 8,470 Kitchen staff 5,990 Utilities 920 Delivery person 532 Delivery vehicle 1,000 Equipment depreciation 456 Rent 2,010 Miscellaneous 832 Total expenses 20,210 0 0 Net operating income $ 6,590 $ $ 0
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