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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: Fixed Cost Cost per Cost per per Month Pizza Delivery Pizza ingredients $ 3.80 Kitchen staff $ 5,220 Utilities Delivery person $ 630 $ 0.05 $ 3.50 Delivery vehicle Rent Miscellaneous $ 540 $ 1.50 Equipment depreciation $ 275 $ 1,830 $ 820 $ 0.15 In November, the pizzeria budgeted for 1,200 pizzas at an average selling price of $13.50 per pizza and for 180 deliveries. Data concerning the pizzeria's actual results in November appear below: Actual Results Pizzas 1,240 Deliveries Revenue 174 $ 17,420 Pizza ingredients $ 4,985 Kitchen staff $ 5,281 Utilities $ 984 Delivery person $ 609 Delivery vehicle $ 655 Equipment depreciation $ 275 Rent $ 1,830 Miscellaneous $ 954
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