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: Pizza ingredients Kitchen staff Utilities Delivery person Delivery vehicle Equipment depreciation Rent Miscellaneous Pizzas Deliveries Revenue Pizza ingredients Kitchen staff Fixed Cost per Month Utilities Delivery person Delivery vehicle. Equipment depreciation Rent Miscellaneous $ 6,250 $ 780 $ 800 $ 536 $ 2,210 $ 900 $ 0.10 In November, the pizzeria budgeted for 2,070 pizzas at an average selling price of $16 per pizza and for 230 deliveries. Data concerning the pizzeria's actual results in November were as follows: Actual Results 2,170 210 $ 35,440 $ 10,270 $ 6,190 $ 970 $ 588 $1,020 $536 Cost per Pizza $ 5.00 $ 1.00 $2,210 $892 Cost per Delivery $ 2.80 $ 2.00 Required: 1. Complete the flexible budget performance report that shows both revenue and spending variances and activity 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.)
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: Pizza ingredients Kitchen staff Utilities Delivery person Delivery vehicle Equipment depreciation Rent Miscellaneous Pizzas Deliveries Revenue Pizza ingredients Kitchen staff Fixed Cost per Month Utilities Delivery person Delivery vehicle. Equipment depreciation Rent Miscellaneous $ 6,250 $ 780 $ 800 $ 536 $ 2,210 $ 900 $ 0.10 In November, the pizzeria budgeted for 2,070 pizzas at an average selling price of $16 per pizza and for 230 deliveries. Data concerning the pizzeria's actual results in November were as follows: Actual Results 2,170 210 $ 35,440 $ 10,270 $ 6,190 $ 970 $ 588 $1,020 $536 Cost per Pizza $ 5.00 $ 1.00 $2,210 $892 Cost per Delivery $ 2.80 $ 2.00 Required: 1. Complete the flexible budget performance report that shows both revenue and spending variances and activity 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.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text: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
Kitchen staff
Utilities
Delivery person
Delivery vehicle
Equipment depreciation
Rent
Miscellaneous
4
Pizzas
Deliveries
Revenue
Pizza ingredients
Kitchen staff
Utilities
Delivery person
Delivery vehicle.
Equipment depreciation
Rent
Miscellaneous
Pizzas
Deliveries
Revenue
Expenses:
Pizza ingredients
Kitchen staff
Utilities
Delivery person
Delivery vehicle
Equipment depreciation
Rent
$ 6,250
$ 780
$ 0.10
In November, the pizzeria budgeted for 2,070 pizzas at an average selling price of $16 per pizza and for 230 deliveries.
Data concerning the pizzeria's actual results in November were as follows:
Miscellaneous
Total expense
Net operating income
$ 800
$ 536
$ 2,210
$.900
Actual
Results
2,170
210
$ 35,440
$ 10,270
$ 6,190
Required:
1. Complete the flexible budget performance report that shows both revenue and spending variances and activity 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.)
$
$ 970
$ 588
$1,020
$536
$2,210
$892
Actual
Results
Cost per
Pizza
$5.00
$
$ 1.00
2,170
210
35,440
Cost per
Delivery
10,270
6,190
970
588
1,020
536
2,210
892
$ 2.80
$ 2.00
Milano Pizza
Flexible Budget Performance Report
For the Month Ended November 30
22,676
12,764
Flexible
Budget
Planning
Budget
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