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 services.
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 per Month | Cost per Pizza | Cost per Delivery | ||||||||
| Pizza ingredients | $ | 4.80 | ||||||||
| Kitchen staff | $ | 6,210 | ||||||||
| Utilities | $ | 760 | $ | 0.80 | ||||||
| Delivery person | $ | 2.60 | ||||||||
| Delivery vehicle | $ | 780 | $ | 1.80 | ||||||
| Equipment depreciation | $ | 520 | ||||||||
| Rent | $ | 2,170 | ||||||||
| Miscellaneous | $ | 880 | $ | 0.20 | ||||||
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 appear below:
| Actual Results | |||
| Pizzas | 2,110 | ||
| Deliveries | 190 | ||
| Revenue | $ | 30,240 | |
| Pizza ingredients | $ | 9,910 | |
| Kitchen staff | $ | 6,150 | |
| Utilities | $ | 960 | |
| Delivery person | $ | 494 | |
| Delivery vehicle | $ | 1,016 | |
| Equipment depreciation | $ | 520 | |
| Rent | $ | 2,170 | |
| Miscellaneous | $ | 880 | |
Required:
1. Compute the revenue and spending variances for the pizzeria for November
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Accounting Multicolumn Journal
Authors: Claudia Gilbertson
11th Edition
1337565423, 9781337565424
