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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 Fixed Cost per Month Cost per Pizza Cost per Delivery $ 4.10 Kitchen staff Utilities Delivery person Delivery vehicle Equipment depreciation Rent Miscellaneous $6,290 $ 800 $ 0.20 $ 3.00 $2.20 $ 820 $552 $2,250 $ 920 $ 0.10 In November, the pizzeria budgeted for 2,130 pizzas at an average selling price of $18 per pizza and for 250 deliveries. Data concerning the pizzeria's actual results in November were as follows:
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