Question

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				$	4.50
Kitchen staff	$	6,370
Utilities	$	840		$	0.60
Delivery person							$	3.40
Delivery vehicle	$	860					$	1.50
Equipment depreciation	$	584
Rent	$	2,330
Miscellaneous	$	960		$	0.10

  

In November, the pizzeria budgeted for 2,250 pizzas at an average selling price of $22 per pizza and for 210 deliveries

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.)

Flexible Budget Performance Report For the Month Ended November 30 Flexible Budget 1,690 210 Planning Budget Actual Results 2,350 190 Pizzas Deliveries Revenue $ 52,480 Expenses: Pizza ingredients Kitchen staff Utilities L Delivery person Delivery vehicle Equipment depreciation Rent Miscellaneous Total expense Net operating income 11,350 6,310 1,000 646 1,032 584 2,330 928 24,180 28,300 $

Answer 1

Flexible Budget Performance Report
For the Month Ended November 30
	Actual Results	Revenue and spending variances		Flexible Budget	Working	Actvity Variance		Planning Budget	Working
Pizzas	2350			2350				2250
Deliveries	190			190				210
Revenue	$52,480	$780	F	$51,700	(2350*22)	$2,200	F	$49,500
Expenses:
Pizza ingredients	$11,350	$775	UF	$10,575	(2350*$4.50)	$450	UF	$10,125	(2250*$4.50)
Kitchen staff	$6,310	$60	F	$6,370			None	$6,370
Utilities	$1,000	$1,250	F	$2,250	(840+ 0.60X2350)	$60	UF	$2,190	(840+ 0.60X2250)
Delivery person	$646	$0	None	$646	(3.40*190)	$68	F	$714	(3.40*210)
Delivery vehicle	$1,032	$113	F	$1,145	(860+1.50*190)	$30	F	$1,175	(860+1.50*210)
Equipment depreciation	$584	$0	None	$584			None	$584
Rent	$2,330	$0	None	$2,330			None	$2,330
Miscellaneous	$928	$267	F	$1,195	(960+0.10*2350)	$10	UF	$1,185	(960+0.10*2250)
Total expense	$24,180	$915	F	$25,095		$422	UF	$24,673
Net operating income	$28,300	$1,695	F	$26,605		$1,778	F	$24,827

Dear student kindly let me know, if you are having any doubt and please mark with positive rating.thanks in advance