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 number of deliveries made. The pizzeria's cost formulas appear below: Fixed Cost per Pizza Cost per Delivery Cost per Month Pizza ingredients Kitchen staff 4.00 $6,050 $ 680 $ 1.00 Utilities Delivery person Delivery vehicle Equipment depreciation $2.80 $2.20 700 456 $2,010 $ 800 Rent $ 0.20 Miscellaneous In November, the pizzeria budgeted for 1,770 pizzas at an average selling price of $14 per pizza and for 210 deliveries. Data concerning the pizzeria's actual results in November appear below Actual Results 1,870 190 Pizzas Deliveries $ 26,800 $ 8,470 5,990 920 532 Revenue Pizza ingredients Kitchen staff Utilities Delivery person Delivery vehicle Equipment depreciation $ 1,000 $ 456 $ 2,010 Rent Miscellaneous 832

Answer 1

Millano Pizza
Flexible Budget Performance Report
For the Month Ended November 30
	Actual	Revenue/spending variance		Flexible	Spending variance		Planning
Pizzas	1870			1870			1770
Deliveries	190			190			10
Revenues	$26,800	$620	F	$26,180	$1,400	F	$24,780
Expenses:
Pizz ingredients	$8,470	$990	U	$7,480	$400	U	$7,080
Kitchen staff	$5,990	$60	F	$6,050	$0	None	$6,050
Utilities	$920	$1,630	F	$2,550	$100	U	$2,450
Delivery person	$532	$0	F	$532	$56	F	$588
Delivery vehicle	$1,000	$118	F	$1,118	$44	F	$1,162
Equipment depreciation	$456	$0	F	$456	$0	None	$456
Rent	$2,010	$0	F	$2,010	$0	None	$2,010
Miscellaneous	$832	$342	F	$1,174	$20	U	$1,154
Total Expenses	$20,210	$1,160	F	$21,370	$420	U	$20,950
Net Operating income	$6,590	$1,780	F	$4,810	$980	F	$3,830

Calculations:

Budgeted
	Variable cost for pizza			Variable cost for delivery			Fixed costs (iii)	Total (i+ii+iii)
	Pizzas	Unit cost	Total (i)	Deliveries	Unit cost	Total (ii)
Revenues	1,770	$14	$24,780					$24,780
Pizz ingredients	1,770	$4.00	$7,080	210		$0.00		$7,080
Kitchen staff	1,770		$0	210		$0	$6,050	$6,050
Utilities	1,770	$1.00	$1,770	210		$0	$680	$2,450
Delivery person	1,770		$0	210	$2.80	$588		$588
Delivery vehicle	1,770		$0	210	$2.20	$462	$700	$1,162
Equipment depreciation	1,770		$0	210		$0	$456	$456
Rent	1,770		$0	210		$0	$2,010	$2,010
Miscellaneous	1,770	$0.20	$354	210		$0	$800	$1,154

Flexible
	Variable cost for pizza			Variable cost for delivery			Fixed costs (iii)	Total (i+ii+iii)
	Pizzas	Unit cost	Total(i)	Deliveries	Unit cost	Total (ii)
Revenues	1,870	$14.00	$26,180					$26,180
Pizz ingredients	1,870	$4.00	$7,480	190		$0		$7,480
Kitchen staff	1,870		$0	190		$0	$6,050	$6,050
Utilities	1,870	$1.00	$1,870	190		$0	$680	$2,550
Delivery person	1,870		$0	190	$2.80	$532		$532
Delivery vehicle	1,870		$0	190	$2.20	$418	$700	$1,118
Equipment depreciation	1,870		$0	190		$0	$456	$456
Rent	1,870		$0	190		$0	$2,010	$2,010
Miscellaneous	1,870	$0.20	$374	190		$0	$800	$1,174