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. Data conceming the pizzeria's costs appear below. Fixed Cost per Month Cost per Pizza $ 4.90 Cost per Delivery $ 6,230 $ 770 $ 0.90 Pizza ingredients Kitchen staff Utilities Delivery person Delivery vehicle Equipment depreciation Rent Miscellaneous 790 S 2.70 S 1.90 A A A 890 $ 0.20 In November, the pizzeria budgeted for 2,040 pizzas at an average selling price of $15 per pizza and for 220 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 2,140 200 $32,810 $ 10,090 $ 6,170 $ 965 $ 540 $ 1,018 $ 528 $ 2,190 $ 886

Answer 1

Milano Pizza
Flexible Budget Report
For the month ended November 30
		Actual results	Revenue and Spending Variances		Flexible Budget	Activity Variance		Planning Budget
Pizzas	x	2140			2140			2040
Deliveries	y	200			200			220
Revenue	($15 * x)	$     32,810	$       710	F	$   32,100	$      1,500	F	$       30,600
Expenses:
Pizza ingredients	($4.90 * x)	$     10,090	$       396	F	$   10,486	$         490	U	$         9,996
Kitchen staff	$                             6,230	$       6,170	$         60	F	$      6,230	$             -	None	$         6,230
Utilities	($770 + $0.90 * x)	$           965	$   1,731	F	$      2,696	$            90	U	$         2,606
Delivery Person	($2.70 * y)	$           540	$          -	None	$         540	$            54	F	$             594
Delivery Vehicle	($790 + $1.90 * y)	$       1,018	$       152	F	$      1,170	$            38	F	$         1,208
Equipment depreciation	$                                528	$           528	$          -	None	$         528	$             -	None	$             528
Rent	$                             2,190	$       2,190	$          -	None	$      2,190	$             -	None	$         2,190
Miscellaneous	($890+ $0.20 * x)	$           886	$       432	F	$      1,318	$            20	U	$         1,298
Total expense		$     22,387	$   2,771	F	$   25,158	$         508	U	$       24,650
Net operating income		$     10,423	$   3,481	F	$      6,942	$         992	F	$         5,950