Question

Fixed Cost per Month Cost Cost per Pizza Delivery Pizza ingredients $ 4.50 Kitchen staff $ 5,930 Utilities $620 $0.40 Delivery person Delivery vehicle Equipment depreciation $ 3.20 $ 1.60 $640 $ 408 Rent $ 1,890 Miscellaneous $ 740 $ 0.20 In November, the pizzeria budgeted for 1,590 pizzas at an average selling price of $16 per pizza and for 230 deliveries. Data concerning the pizzeria's operations in November appear below: Pizzas Deliveries Revenue Pizza ingredients Kitchen staff Utilities Delivery person Delivery vehicle Equipment depreciation Rent Miscellaneous Actual Results 1,690 210 $27,600 $ 7,390 $ 5,870 $ 890 $ 672 $ 988 $ 408 $ 1,890 $ 796 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 Flexible Budget Performance Report For the Month Ended November 30 Revenue and Actual Flexible Spending Activity Variances Results Variances Budget $ 27,600 Planning Budget | 7,390 5,870 890 672 Revenue Expenses: Pizza ingredients Kitchen staff Utilities narcon Delivery person Delivery vehicle Equipment depreciation Rent Miscellaneous Total expense Net operating income 9881 408 1,890 796 18,904 8.696 $

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. Data concerning the pizzeria’s costs appear below:

Answer 1

	Milano Pizza
	Flexible Budget Performance Report
	For the Month Ended November 30
	Actual Results	Revenue and spending variances		Flexible Budget	Activity variances		Planning Budget
Revenue	27600	560	F	27040	1600	F	25440
Expenses:
Pizza ingredients	7390	215	F	7605	450	U	7155
Kitchen staff	5870	60	F	5930	0	None	5930
Utilities	890	406	F	1296	40	U	1256
Delivery person	672	0	None	672	64	F	736
Delivery vehicle	988	12	U	976	32	F	1008
Equipment depreciation	408	0	None	408	0	None	408
Rent	1890	0	None	1890	0	None	1890
Miscellaneous	796	282	F	1078	20	U	1058
Total expense	18904	951	F	19855	414	U	19441
Net operating income	8696	1511	F	7185	1186	F	5999