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: Cost per Delivery Fixed Cost Cost per per Month Pizza $ 4.90 $6,230 $ 770 $ 0.90 Pizza ingredients Kitchen staff Utilities Delivery person Delivery vehicle Equipment depreciation Rent Miscellaneous $2.70 $1.90 $ 790 $ 528 $ 2,190 $ 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 actual results in November appear below:

Answer 1

		Flexible Budget Performance Report
		Actual results	Revenue & spending		Flexible	Activity variance		Planning
			Variaance		budget			Budget
Pizzas		2,140			2,140			2,040
Deliveries		200			200			220
Revenue		32,810	710	F	32100	1500	F	30600
Expenses:
pizza ingredients		10,090	396	F	10486	490	U	9996
Kitchen staff		6,170	60	F	6,230	0	N	6,230
Utilities		965	1,731	F	2696	90	U	2606
Delivery person		540	0	N	540	54	F	594
delivery vehicle		1,018	152	F	1170	38	F	1208
Equipment depreciation		528	0	N	528	0	N	528
Rent		2,190	0	N	2,190	0	N	2,190
Miscellaneous		886	432	F	1318	20	U	1298
total expense		22,387	2,771	F	25158	508	U	24650
net operating income		10,423	3,481	F	6942	992	F	5950