Question
Problem 9-19 More Than One Cost Driver [LO9-2, LO9-3] Milano Pizza is a small neighborhood pizzeria that has a small area for in-store dining as
Problem 9-19 More Than One Cost Driver [LO9-2, LO9-3]
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 pizzerias owner has determined that the shop has two major cost driversthe number of pizzas sold and the number of deliveries made.
The pizzerias cost formulas appear below:
| Fixed Cost per Month | Cost per Pizza | Cost per Delivery | ||||||||
| Pizza ingredients | $ | 4.80 | ||||||||
| Kitchen staff | $ | 5,990 | ||||||||
| Utilities | $ | 650 | $ | 0.70 | ||||||
| Delivery person | $ | 3.50 | ||||||||
| Delivery vehicle | $ | 670 | $ | 1.90 | ||||||
| Equipment depreciation | $ | 432 | ||||||||
| Rent | $ | 1,950 | ||||||||
| Miscellaneous | $ | 770 | $ | 0.10 | ||||||
In November, the pizzeria budgeted for 1,680 pizzas at an average selling price of $19 per pizza and for 180 deliveries.
Data concerning the pizzerias actual results in November appear below:
| Actual Results | |||
| Pizzas | 1,780 | ||
| Deliveries | 160 | ||
| Revenue | $ | 34,410 | |
| Pizza ingredients | $ | 7,930 | |
| Kitchen staff | $ | 5,930 | |
| Utilities | $ | 905 | |
| Delivery person | $ | 560 | |
| Delivery vehicle | $ | 994 | |
| Equipment depreciation | $ | 432 | |
| Rent | $ | 1,950 | |
| Miscellaneous | $ | 814 | |
Required:
1. Compute the revenue and spending variances for the pizzeria for November. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.)
Brewer_8e_Rechecks_2019_10_17
Milano Pizza Revenue and Spending Variances For the Month Ended November 30 Actual Revenue and Spending Results Variances Flexible Budget Pizzas 1,780 Deliveries 160 Revenue 34,410 Expenses: Pizza ingredients 7,930 Kitchen staff 5,930 Utilities 905 Delivery person 560 Delivery vehicle 994 Equipment depreciation 432 Rent 1,950 Miscellaneous 814 Total expense 19,515 Net operating income $ 14,895Step by Step Solution
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Beyond Agile Auditing Three Core Components To Revolutionize Your Internal Audit Practices
Authors: Clarissa Lucas
1st Edition
1950508676, 978-1950508679
