Answered step by step
Verified Expert Solution
Question
1 Approved Answer
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: Fixed Cost per Month Cost per Pizza $ 4.60 Cost per Delivery $ 5,950 $ 630 $ 8.50 Pizza ingredients Kitchen staff Utilities Delivery person Delivery vehicle Equipment depreciation Rent Miscellaneous $ 3.30 $ 1.70 $ 650 $ 416 $ 1,910 $ 750 $ 0.25 In November, the pizzeria budgeted for 1.620 pizzas at an average selling price of $17 per pizza and for 240 deliveries. Data concerning the pizzeria's actual results in November appear below: Pizzas Deliveries Revenue Pizza ingredients Kitchen staff Utilities Delivery person Delivery vehicle Equipment depreciation Rent Miscellaneous Actual Results 1,720 220 $ 29,810 $ 7,570 $ 5,890 $ 895 $ 726 $ 990 $ 416 $ 1,910 $ 892 Required: 1. Compute the revenue and spending variances for the pizzeria for November. (Indicate the effect of each varlance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (1.e., zero varlance). Input all amounts as positive values.) Milano Pizza Revenue and Spending Variances For the Month Ended November 30 Actual Revenue and Spending Results Variances 1,720 220 Flexible Budget Pizzas Deliveries Revenue $ 29,810 Expenses: Pizza ingredients Kitchen staff 7.570 5,890 Utilities 895 726 Delivery person Delivery vehicle Equipment depreciation 990 418 Rent 1.910 802 Miscellaneous Total expense 19,199 Net operating income s 10.811
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started