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 $ 4.80 0.70 per Month Pizza Delivery Pizza ingredients Kitchen staff Utilities Delivery person Delivery vehicle Equipment depreciation Rent Miscellaneous $5,990 $ 650 $3.50 $1.90 $ 670 432 $1,950 $ 770 0.10 In November, the pizzeria budgeted for 1,680 pizzas at an average selling price of $19 per pizza and for 180 deliveries Data concerning the pizzeria\'s actual results in November appear below:

Solution

Answers

Actual Revenues are less than Budgeted, or
Actual Expenses are more than Budgeted,
Actual Net Income is less than Budgeted.

Actual Revenues are more than Budgeted, or
Actual Expenses are less than Budgeted,
Actual Net Income is more than Budgeted.

Actual Results

Spending Variances

Flexible Budget

Activity Variances

Planning Budget

Pizzas

                    1,780

                            1,780

                    1,680

Deliveries

                       160

                                160

                       180

Revenues

$        34,410.00

$                                   590.00

Favourable

$                 33,820.00

$                          1,900.00

Favourable

$        31,920.00

Expenses:

Pizza Ingrediants

$          7,930.00

$                                   614.00

Favourable

$                   8,544.00

$                              480.00

Unfavourable

$          8,064.00

kitchen Staff

$          5,930.00

$                                     60.00

Favourable

$                   5,990.00

$                                       -  

None

$          5,990.00

Utilities

$              905.00

$                                   991.00

Favourable

$                   1,896.00

$                                70.00

Unfavourable

$          1,826.00

Delivery Person

$              560.00

$                                            -  

None

$                       560.00

$                                70.00

Favourable

$              630.00

Delivery Vehicle

$              994.00

$                                     20.00

Unfavourable

$                       974.00

$                                38.00

Favourable

$          1,012.00

Equipment Depreciation

$              432.00

$                                            -  

None

$                       432.00

$                                       -  

None

$              432.00

Rent

$          1,950.00

$                                            -  

None

$                   1,950.00

$                                       -  

None

$          1,950.00

Miscellaneous

$              814.00

$                                   134.00

Favourable

$                       948.00

$                                10.00

Unfavourable

$              938.00

Total Expenses

$        19,515.00

$                               1,779.00

Favourable

$                 21,294.00

$                              452.00

Unfavourable

$       20,842.00

Net Operating Income

$        14,895.00

$                               2,369.00

Favourable

$                 12,526.00

$                          1,448.00

Favourable

$        11,078.00

----Working for calculation of above data----

Actual Results

Flexible Budget

Planning Budget

Pizzas

1780

1780

1680

Deliveries

160

160

180

Revenues

34410

=1780*19

=1680*19

Expenses:

Pizza Ingrediants

7930

=1780*4.8

=1680*4.8

kitchen Staff

5930

5990

5990

Utilities

905

=650+(0.7*1780)

=650+(0.7*1680)

Delivery Person

560

=3.5*160

=3.5*180

Delivery Vehicle

994

=670+(1.9*160)

=670+(1.9*180)

Equipment Depreciation

432

432

432

Rent

1950

1950

1950

Miscellaneous

814

=770+(1780*0.1)

=770+(1680*0.1)

Total Expenses

Total Expenses

Total Expenses

Total Expenses

Net Operating Income

Revenues – Total expenses

Revenues – Total expenses

Revenues – Total expenses

	Actual Results	Spending Variances	Flexible Budget	Activity Variances	Planning Budget
Pizzas	1,780			1,780			1,680
Deliveries	160			160			180
Revenues	$        34,410.00	$                                   590.00	Favourable	$                 33,820.00	$                          1,900.00	Favourable	$        31,920.00
Expenses:
Pizza Ingrediants	$          7,930.00	$                                   614.00	Favourable	$                   8,544.00	$                              480.00	Unfavourable	$          8,064.00
kitchen Staff	$          5,930.00	$                                     60.00	Favourable	$                   5,990.00	$                                       -	None	$          5,990.00
Utilities	$              905.00	$                                   991.00	Favourable	$                   1,896.00	$                                70.00	Unfavourable	$          1,826.00
Delivery Person	$              560.00	$                                            -	None	$                       560.00	$                                70.00	Favourable	$              630.00
Delivery Vehicle	$              994.00	$                                     20.00	Unfavourable	$                       974.00	$                                38.00	Favourable	$          1,012.00
Equipment Depreciation	$              432.00	$                                            -	None	$                       432.00	$                                       -	None	$              432.00
Rent	$          1,950.00	$                                            -	None	$                   1,950.00	$                                       -	None	$          1,950.00
Miscellaneous	$              814.00	$                                   134.00	Favourable	$                       948.00	$                                10.00	Unfavourable	$              938.00
Total Expenses	$        19,515.00	$                               1,779.00	Favourable	$                 21,294.00	$                              452.00	Unfavourable	$       20,842.00
Net Operating Income	$        14,895.00	$                               2,369.00	Favourable	$                 12,526.00	$                          1,448.00	Favourable	$        11,078.00