Milano 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 The pizzeria\'s cost formulas appear below: Fixed Cost Cost per Cost per $ 4.20 $0.30 per Month Pizza Delivery Pizza ingredients Kitchen staff Utilities Delivery person Delivery vehicle Equipment depreciatiorn Rent Miscellaneous $6,310 $ 810 $3.10 $1.20 $ 830 $ 560 $2,270 $ 930 $ 0.15 In November, the pizzeria budgeted for 2,160 pizzas at an average selling price of $19 per pizza and for 180 deliveries

Solution

Flexible budget performance report :

	Actual results			Flexible budget			Planning budget
Pizzas	2260			2260			2160
Deliveries	160			160
Revenue	43690	750	F	42940	1900	F	41040
Expenses
Pizza ingredients	10810	1318	U	9492	420	U	9072
Kitchen staff	6250	60	F	6310	0	None	6310
Utilities	985	503	F	1488	30	U	1458
Delivery person	496	0	None	496	62	F	558
Delivery vehicle	1026	4	U	1022	24	F	1046
Equipment depreciation	560	0	None	560	0	None	560
Rent	2270	0	None	2270	0	None	2270
Miscellanoues	910	359	F	1269	15	U	1254
Total expense	23307	400	U	22907	379	U	22528
Net operating income	20383	350	F	20033	1521	F	18512