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 drivers- the number of pizzas sold and the number of deliveries made . The pizzeria's cost formulas appear below : Fixed Cost per month Pizza ingredients 0 Kitchen staff $5220 Utilities $630 Delivery person 0 Delivery vehicle $540 Equipment depreciation $275 Rent $1830 Miscellaneous $820. Cost per pizza Pizza Ingredients $3.80 Kitchen staff 0 Utilities $0.05 Delivery person 0 Delivery vehicle 0 Equipment depreciation 0 Rent 0 Miscellaneous $0.15. Cost per delivery Pizza Ingredients 0 Kitchen staff 0 Utilities 0 Delivery person $3.50 Delivery vehicle $1.50 Equipment depreciation 0 Rent 0 Miscellaneous 0. 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 1240 Deliveries 174 Revenue $17420 Pizza ingredients $4985 Kitchen staff $5281 Utilities $984 Delivery person $609 Delivery vehicle $655 Equipment depreciation $275 Rent $1830 Miscellaneous $954. Required: 1. Compute the revenue and spending variances for the pizzeria for November. (Indicate the effect of each variance by selecting for favorable, "U" for unfavorable , and "None" for no effect (i.e., zero variance). Input all amounts as positive values .)
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