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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
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 Fixed Cost per Month Cost per Pizza $ 4.50 Cost per Delivery $ 6,150 $ 730 $ 0.50 $ 750 $ 3.30 $ 1.50 Rent Equipment depreciation Miscellaneous $ 496 $ 2,110 $ 850 $ 0.25 In November, the pizzeria budgeted for 1,920 pizzas at an average selling price of $19 per pizza and for 180 deliveries. Data concerning the pizzeria's actual results in November appear below: Pizzas Deliveries Revenue Pizza ingredients Kitchen staff Utilities Delivery person Actual Results 2,020 160 $ 39,050 $ 9,370 $ 6,090 $ 945 $ 528 Delivery vehicle Equipment depreciation Rent Miscellaneous Required: $ 1,010 $ 496 $ 2,110 $ 862 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 (l.e., zero varlance). Input all amounts as positive values.) Pizzas Deliveries Revenue Milano Pizza Revenue and Spending Variances For the Month Ended November 30 Actual Results Revenue and Spending Variances Flexible Budget 2,020 160 $ 39,050 Expenses: Pizza ingredients 9,370 Kitchen staff 6,090 Utilities 945 Delivery person 528 Delivery vehicle 1,010 Equipment depreciation 496 Rent 2,110 Miscellaneous 862 Total expense 21,411
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