Pie Guys pizzeria is owned and operated by three brothers. Data concerning the pizzeria's monthly revenues and costs appear below (q refers to the number of pizzas served)

	Formula
Revenue	$14q
cost of ingredients	$3.50q
rent	$2,500
utilities	$600+ $0.20q
wages	$7,500
miscellaneous	$300+ $.50q

Actual results for February appear below. Prepare a flexible budget performance report for the pizzeria for February for 1,200 pizzas.

revenue	$17,000
cost of ingredients	4,150
rent	2,500
utilities	908
wages	7,600
miscellaneous	850

Required:

1. prepare a budget for 1,300 pizzas (this is the static budget).
2. prepare a budget for 1,200 pizzas (this is the flexible budget).
3. 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.