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 $ 4.30 Cost per Delivery $6,330 $ 820 $ 0.40 Pizza ingredients Kitchen staff Utilities Delivery person Delivery vehicle Equipment depreciation Rent Miscellaneous $3.20 $1.30 $ 840 $ 568 $ 2,290 $ 940 $ 0.20 In November, the pizzeria budgeted for 2.190 pizzas at an average selling price of $20 per pizza and for 190 deliveries. Data concerning the pizzeria's actual results in November appear below: Actual Results 2,290 Pizzas Deliveries 170 $ $ $ Revenue Pizza ingredients Kitchen staff Utilities Delivery person Delivery vehicle Equipment depreciation Rent Miscellaneous 46,560 19,990 6,270 990 544 1,028 568 2,290 916 $ $ $

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
Pizzas	2290			2290			2190
Deliveries	170			170			190
Revenue	46560	760	F	45800	2000	F	43800
Expenses:
Pizza ingredients	10990	1143	U	9847	430	U	9417
Kitchen staff	6270	60	F	6330	0	None	6330
Utilities	990	746	F	1736	40	U	1696
Delivery person	544	0	None	544	64	F	608
Delivery vehicle	1028	33	F	1061	26	F	1087
Equipment depreciation	568	0	None	568	0	None	568
Rent	2290	0	None	2290	0	None	2290
Miscellaneous	916	482	F	1398	20	U	1378
Total expense	23596	178	F	23774	400	U	23374
Net operating income	22964	938	F	22026	1600	F	20426