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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 Equipment depreciation Fixed Cost per Month Cost per Pizza Cost per Delivery $4.50 $5,930 $620 $0.40 $3.20 $640 $1.60 $408 $1,890 $740 $0.20 Rent Miscellaneous In November, the pizzeria budgeted for 1,590 pizzas at an average selling price of $16 per pizza and for 230 deliveries. Data concerning the pizzeria's actual results in November appear below: Pizzas Deliveries Revenue Pizza ingredients Kitchen staff Utilities Delivery person Actual Results 1,690 210 $27,600 $7,390 $5,870 $ 890 $ 672 $ 988 Delivery vehicle Equipment depreciation Rent Miscellaneous $ 408 $1,890 $ 796
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