Question
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 Pizza ingredients Kitchen staff per Month Pizza Delivery $ 3.80 $ 5,220 Utilities $ 630 $ 0.05 Delivery person Delivery vehicle $ 540 $ 3.50 $ 1.50 Equipment depreciation. Rent $ 275 $ 1,830 $ 820 $ 0.15 Miscellaneous 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: Pizzas Actual Results 1,240 174 Deliveries: Revenue Kitchen staff $17,420 Pizza ingredients $ 4,985 $ 5,281 Utilities $ 984 Delivery person $ 609 Delivery vehicle. $ 655 Equipment depreciation: $ 275 Rent $ 1,830 Miscellaneous $ 954
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