Homework SourseMilano Pizza is a small neighborhood pizzeria that has a sma
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 concerning the pizzeria’s costs appear below:
Complete the flexible budget performance report that shows both revenue and spending variances and activity variances for the pizzeria for November. (Indicate the effect of each variance by selecting \"F\" for favorable, \"U\" for unfavorable, and \"None\" for no effect (i.e., zero variance). Input all amounts as positive values.)
| 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 concerning the pizzeria’s costs appear below: |
Solution
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 2020 2020 1920 Deliveries y 160 160 180 Revenue ($19 * x) $ 39,050 $ 670 F $ 38,380 $1,900 F 36480 Expenses: Pizza ingredients ($4.50 * x) $ 9,370 $ 280 U $ 9,090 $ 450 U $ 8,640 Kitchen staff $6,150 $ 6,090 $ 60 F $ 6,150 0 None $ 6,150 Utilities ($730 + $0.50 * x) $ 945 $ 795 F $ 1,740 $ 50 U $ 1,690 Delivery Person ($3.30 * y) $ 528 0 None $ 528 $ 66 F $ 594 Delivery Vehicle ($750 + $1.50 * y) $ 1,010 $ 20 U $ 990 $ 30 F $ 1,020 Equipment depreciation $496 $ 496 0 None $ 496 0 None $ 496 Rent $2,110 $ 2,110 0 None $ 2,110 0 None $ 2,110 Miscellaneous ($850+ $0.25 * x) $ 862 $ 493 F $ 1,355 $ 25 U $ 1,330 Total expense $ 21,411 $1,048 F $ 22,459 $ 429 U $ 22,030 Net operating income $ 17,639 $1,718 F $ 15,921 $1,471 F $ 14,450
