Question

Problem 9-21 More Than One Cost Driver (LO9-2, LO 9-3, LO 9-4, LO9-5] 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 $ 4.20 cost per Delivery $6,090 $ 700 $ 0.20 Pizza ingredients Kitchen staff Utilities Delivery person Delivery vehicle Equipment depreciation Rent Miscellaneous $3.00 $1.20 $ 720 $ 472 $ 2,050 $ 820 $ 0.10 In November, the pizzeria budgeted for 1,830 pizzas at an average selling price of $16 per pizza and for 230 deliveries. Data concerning the pizzeria's actual results in November appear below:

Answer 1

Milano Pizza Flexible Budget Performance Report For the Month Ended November 30 Revenue and Flexible Activity Planning Actual Results Spending Variances Budget Variances Budget 1930 1930 1830 210 210 230 Pizzas (9) Deliveries (r) 31520 640 F 30880 1600 F 29280 8830 Revenue ($16.00q) Expenses: Pizza Ingredients ($4.209) Kitchen Staff ($6,090) Utilities ($700 + $0.209) Delivery person ($3.00 r) Delivery Vehicle ($720 + $1.20 r) Equipment Depreciation ($472) Rent ($2,050) Miscellaneous ($820 + $0.100) Total expense Net operating income 6030 930 630 1004 724 U 60 F 156 F None 32 U None None 169 F 371 U 269 F 8106 6090 1086 630 972 472 2050 1013 20419 10461 420 U None 20 u 60 F 24 F None None 10 U 366 U 1234 F 7686 6090 1066 690 996 472 2050 1003 20053 9227 472 2050 20790 10730

C D 1 Milano Pizza 2 3 Flexible Budget Performance Report 4 For the Month Ended November 30 5 Revenue and Spending Variances Activity Variances 6 Actual Results Flexible Budget 1930 210 Planning Budget 1830 230 1930 210 31520 640 F =D7*16 1600 F =F7*16 =F7*4.2 7 Pizzas (9) 8 Deliveries (r) 9 10 Revenue ($16.00q) 11 Expenses: 12 Pizza Ingredients ($4.20q) 13 Kitchen Staff ($6,090) 14 Utilities ($700 + $0.209) 15 Delivery person ($3.00 r) 16 Delivery Vehicle ($720 + $1.20 r) 17 Equipment Depreciation ($472) 18 Rent ($2,050) 19 Miscellaneous ($820 + $0.100) 20 Total expense 21 Net operating income 8830 6030 930 630 1004 472 2050 844 =SUM(B12:319) =B10-B20 724 U 60 F 156 F None 32U None None 169 F 371 U 269 F =D7*4.2 6090 =700+(0.2*07) 3*D8 1.2*D81720 472 2050 =0.1*D7+820 =SUM(D12:D19) =D10-D20 420 U None 20 U 60 F 24 F None None 10 U 366 U 1234 F 6090 =700+0.2*F7) =3*F8 =1.2*F8+720 472 2050 =0.1*F7+820 =SUM(F12:F19) =F10-F20 22