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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.
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: Pizza ingredients Kitchen staff Utilities Delivery person Delivery vehicle Equipment depreciation Rent Miscellaneous Pizzas Deliveries Revenue Pizza ingredients Kitchen staff Utilities Delivery person Delivery vehicle Equipment depreciation Rent Fixed Cost per Month Miscellaneous $ 6,030 $ 670 $ 690 $ 448 $ 1,990 $ 790 In November, the pizzeria budgeted for 1,740 pizzas at an average selling price of $13 per pizza and for 200 deliveries. Data concerning the pizzeria's actual results in November were as follows: Actual Results 1,840 180 Cost per Pizza $ 5.00 $0.90 $ 24,530 $ 8,290 $ 5,970 $915 $ 486 $998 $448 $ 1,990 $ 826 $ 0.15 Cost per Delivery $ 2.70 $ 2.10
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