Question
Milano Pizza is a small pizzeria that has a small area for in-store dining as well as offering take-out and free home delivery services. The
Milano Pizza is a small pizzeria that has a small area for in-store dining as well as offering take-out and free home delivery services. The pizzerias owner has determined that the shop has two major cost drivers number of pizzas sold and number of deliveries made. Data concerning the pizzerias costs appear below:
| Fixed Cost / Month | Cost / Pizza | Cost / Delivery |
Pizza Ingredients |
| $3.80 |
|
Kitchen Staff | $5,220 |
|
|
Utilities | $630 | $0.05 |
|
Delivery Person |
|
| $3.50 |
Delivery Vehicle | $540 |
| $1.50 |
Equipment Depreciation | $275 |
|
|
Rent | $1,830 |
|
|
Miscellaneous | $820 | $0.15 |
|
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 pizzerias operations in November appear below:
| Actual Results |
Pizzas | 1,240 |
Deliveries | 174 |
Revenue | $17,420 |
Pizza Ingredients | $4,985 |
Kitchen Staff | $5,281 |
Utilities | $984 |
Delivery Person | $609 |
Delivery Vehicle | $655 |
Equipment Depreciation | $275 |
Rent | $1,830 |
Miscellaneous | $954 |
Required:
Compute the activity revenue, activity spending, revenue, and spending variances for each item and in total for November. Do not forget to mark favorable or unfavorable for each item. (It may help to create standard and flexible budgets and actual results side by side)
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