Question

The pizzeria’s cost formulas appear below:

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

	Actual Results
Pizzas		2,140
Deliveries		200
Revenue	$	32,810
Pizza ingredients	$	10,090
Kitchen staff	$	6,170
Utilities	$	965
Delivery person	$	540
Delivery vehicle	$	1,018
Equipment depreciation	$	528
Rent	$	2,190
Miscellaneous	$	886

Milano Pizza
Flexible Budget Performance Report
For the Month Ended November 30
	Actual Results			Flexible Budget			Planning Budget
Pizzas	2,140
Deliveries	200
Revenue	$32,810
Expenses:
Pizza ingredients	10,090
Kitchen staff	6,170
Utilities	965
Delivery person	540
Delivery vehicle	1,018
Equipment depreciation	528
Rent	2,190
Miscellaneous	886
Total expense	22,387
Net operating income

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	2140			2140			2040
Deliveries	200			200			220
Revenue	32810	710	F	32100	1500	F	30600
Expenses:
Pizza ingredients	10090	396	F	10486	490	U	9996
Kitchen staff	6170	60	F	6230	0	None	6230
Utilities	965	1731	F	2696	90	U	2606
Delivery person	540	0	None	540	54	F	594
Delivery vehicle	1018	152	F	1170	38	F	1208
Equipment depreciation	528	0	None	528	0	None	528
Rent	2190	0	None	2190	0	None	2190
Miscellaneous	886	432	F	1318	20	U	1298
Total expense	22387	2771	F	25158	508	U	24650
Net operating income	10423	3481	F	6942	992	F	5950