Introduction To Managerial Accounting
8th Edition
ISBN: 9781259917066
Author: BREWER, Peter C., Garrison, Ray H., Noreen, Eric W.
Publisher: Mcgraw-hill Education,
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Chapter 9, Problem 19P
More than One Cost Driver
Milano Pizza is a small neighborhood pizzeria that has a small area for in-store dining as 11 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 pizzerias cost formulas appear below:
In November, the pizzeria budgeted for 1.200 pizzas at an average selling price of $13.50 per pizza and for 180 deliveries.
Date concerning the pizzeria’s actual results in Noverber appear below:
Required:
1. Compute the revenue and spending variances for the pizzeria for November.
(Hint: Refer to Exhibit 9−6.)
2. Explain the revenue and spending variances.
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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
Cost per Pizza
Cost per Delivery
Pizza ingredients
$ 4.90
Kitchen staff
$ 6,010
Utilities
$ 660
$ 0.80
Delivery person
$ 2.60
Delivery vehicle
$ 680
$ 2.00
Equipment depreciation
$ 440
Rent
$ 1,970
Miscellaneous
$ 780
$ 0.10
In November, the pizzeria budgeted for 1,710 pizzas at an average selling price of $20 per pizza and for 190 deliveries.
Data concerning the pizzeria’s actual results in November were as follows:
Actual Results
Pizzas
1,810
Deliveries
170
Revenue
$ 36,800
Pizza ingredients
$ 8,110
Kitchen staff
$ 5,950
Utilities
$ 910
Delivery person
$…
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 Costper Month
Cost perPizza
Cost perDelivery
Pizza ingredients
$
4.70
Kitchen staff
$
5,970
Utilities
$
640
$
0.60
Delivery person
$
3.40
Delivery vehicle
$
660
$
1.80
Equipment depreciation
$
424
Rent
$
1,930
Miscellaneous
$
760
$
0.06
In November, the pizzeria budgeted for 1,650 pizzas at an average selling price of $18 per pizza and for 250 deliveries.
Data concerning the pizzeria’s actual results in November appear below:
Actual Results
Pizzas
1,750
Deliveries
230
Revenue
$
32,080…
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
Cost per Pizza
Cost per Delivery
Pizza ingredients
$ 4.60
Kitchen staff
$ 5,950
Utilities
$ 630
$ 0.50
Delivery person
$ 3.30
Delivery vehicle
$ 650
$ 1.70
Equipment depreciation
$ 416
Rent
$ 1,910
Miscellaneous
$ 750
$ 0.25
In November, the pizzeria budgeted for 1,620 pizzas at an average selling price of $17 per pizza and for 240 deliveries.
Data concerning the pizzeria’s actual results in November appear below:
Actual Results
Pizzas
1,720
Deliveries
220
Revenue
$ 29,810
Pizza ingredients
$ 7,570
Kitchen staff
$ 5,890
Utilities
$ 895
Delivery person
$ 726…
Chapter 9 Solutions
Introduction To Managerial Accounting
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