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 Cost Cost per Delivery per Pizza per Month Pizza $4.10 ingredients Kitchen staff $6,070 Utilities Delivery person Delivery vehicle $ $0.10 690 $2.90 $ $2.30 710 Equipment depreciation Rent Miscellaneous $ 464 $2,030 $810 $0.05 In November, the pizzeria budgeted for 1,800 pizzas at an average selling price of $15 per pizza and for 220 deliveries. Data concerning the pizzeria's actual results in November appear below: Actual Results 1,900 200 Pizzas Deliveries $29,130 8,650 6,010 Revenue Pizza ingredients Kitchen staff Utilities $ 925 Delivery person Delivery vehicle Equipment depreciation Rent Miscellaneous $ 580 $ 1,002 $ 464 $ 2,030 $ 838 Required:

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	1900			1900			1800
Deliveries	200			200			220
Revenue	29130	630	F	28500	1500	F	27000
Expenses:
Pizza ingredients	8650	860	U	7790	410	U	7380
Kitchen staff	6010	60	F	6070	0	None	6070
Utilities	925	45	U	880	10	U	870
Delivery person	580	0	None	580	58	F	638
Delivery vehicle	1002	168	F	1170	46	F	1216
Equipment depreciation	464	0	None	464	0	None	464
Rent	2030	0	None	2030	0	None	2030
Miscellaneous	838	67	F	905	5	U	900
Total expense	20499	610	U	19889	321	U	19568
Net operating income	8631	20	F	8611	1179	F	7432