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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 driversthe 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 ingredients Pizza $ 4.80 Delivery Kitchen staff Utilities $ 6,210 $ 760 $ 0.80 Delivery person $ 2.60 Delivery vehicle $ 780 $ 1.80 Equipment depreciation $ 520 $ 2,170 $ 880 $ 0.20 Rent Miscellaneous In November, the pizzeria budgeted for 2,010 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 2,110 Pizzas Deliveries Revenue Pizza ingredients Kitchen staff 190 $ 30,240 $ 9,910 Utilities Delivery person Delivery vehicle Equipment depreciation Rent Miscellaneous $ 6,150 $ 960 $ 494 $ 1,016 $ 520 $ 2,170 $ 880 Required: 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.) Pizzas Deliveries Milano Pizza Flexible Budget Performance Report For the Month Ended November 30 Revenue and Spending Variances Actual Results 2,110 190 30,240 Revenue Expenses: Pizza ingredients 9,910 Kitchen staff 6,150 Utilities 960 Delivery person 494 Delivery vehicle 1,016 Equipment depreciation 520 Rent 2,170 Miscellaneous Total expense Net operating income SA 880 22,100 8,140 Flexible Budget Activity Variances Planning Budget EA 0 0 $ 0
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