Pie Guys Pizzeria is owned and operated by three brothers. Data concerning the pizzerias monthly revenues and costs appear below (q refers to the number of pizzas served): Formula Revenue $14.35q Cost of ingredients $4.25q Rent $2,150 Utilities $300 + $0.35q Salaries $6,100 Miscellaneous $600 + $.55q Actual results for February appear below. Prepare a flexible budget performance report for the pizzeria for February for 1,300 pizzas. Revenue $18,500 Cost of ingredients 5,820 Rent 2,150 Utilities 658 Salaries 6,200 Miscellaneous 1,250 Required: a. Prepare a budget for 1,200 pizzas (this is the planning budget). b. Prepare a budget for 1,300 pizzas (this is the flexible budget). c. Compute the activity variances between the two budgets and revenue/spending variances between the actual data and the flexible budget. Also indicate whether the variance is favorable or unfavorable. Actual Units Actual Results Revenue & Spending Variances Flexible Budget Activity Variances Planning Budget Revenue Expenses: Cost of ingredients Rent Utilities Salaries Miscellaneous Total expenses Net operating income