Milano Pizza is a small neighborhood pizzeria that has a small area for in-store dining as well as offering take-out and tree 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 Cost per Cost per per Month Pizza Delivery Pizza ingredients $ 4.30 Kitchen statt $5,890 Utilities $ 600 $ 0.20 Delivery person $3.00 Delivery vehicle $ 620 $1.40 Equipment depreciation $ 392 Rent $1,850 Miscellaneous $ 720 $0.10 In November, the pizzeria budgeted for 1.530 plzzas 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: Pizzas Deliveries Revenue Pizza ingredients Kitchen staff Utilities Delivery person Delivery vehicle Equipment depreciation Rent Miscellaneous Actual Resulta 1,630 190 $ 23,360 $ 7.030 $ 5,830 $ 880 $ 570 $ 984 $ 392 $ 1,850 $ 784 2 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.) ts Milano Pizza Flexible Budget Performance Report For the Month Ended November 30 Flexible Budget ebook Planning Budget Actual Results 1,630 190 Pizzas Deliveries Herences Revenue $ 23,360 7,030 5,830 880 570 Expenses Pizza ingredients Kitchen statt Utilities Delivery person Delivery vehicle Equipment depreciation Rent Miscellaneous Total expense Net operating income 984 392 1.850 784 18,320 5,040 0 0 $ 0 $ O Frank Weston, supervisor of the Freemont Corporation's Machining Department, was visibly upset after being reprimanded for his department's poor performance over the prior month. The department's cost control report is given below. Freemont Corporation Machining Department Cost Control Report Tor the Month Ended June 30 Actual Planning Results Budget Variances Machine-hours 42,000 40,000 Direct labor wages $ 85,700 $ 83,200 $ 2,500 U Supplies 26,800 24,400 2,400 V Maintenance 25,200 22,100 3,100 U Utilities 22,900 20,900 2.000 U Supervision 52,000 52,000 0 Depreciation 89.000 89.000 Total $ 301,600 $291,600 $10,000 U os just can't understand all of these unfavorable variances." Weston complained to the supervisor of another department. "When the boss called me in, I thought he was going to give me a pat on the back because I know for a fact that my department worked more efficiently last month than it has ever worked before. Instead, he tore me apart. I thought for a minute that it might be over the supplies that were stolen out of our warehouse last month. But they only amounted to a couple of hundred dollars, and just look at this report Everything is unfavorable." Direct labor wages and supplies are variable costs; supervision and depreciation are fixed costs, and maintenance and utilities are mixed costs. The fixed component of the budgeted maintenance cost is $16,500, the fixed component of the budgeted utilities cost is $13,900. $13,900 Required: 2. Complete the performance report that will help Mr. Weston's superiors assess how well costs were controlled in the machining department (Round your intermediate calculations to 2 decimal places. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (t.e., zero variance). Input all amounts as positive values.) Freemont Corporation Machining Department Flexible Budget Performance Report For the Month Ended June 30 Actual Flexible Results Budget 42,000 Planning Budget 40.000 Machine-hours Direct labor wages Supplies Maintenance Utilities Supervision Depreciation Total $ 85,700 26,800 25,200 22,900 52,000 89,000 $ 301,600 $ 83,200 24,400 22,100 20,900 52,000 89,000 $ 291,600 $
