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 per Month Cost per Pizza Cost per Delivery Pizza
ingredients $ 5.00 Kitchen staff $ 6,250 Utilities $ 780 $ 1.00
Delivery person $ 2.80 Delivery vehicle $ 800 $ 2.00 Equipment
depreciation $ 536 Rent $ 2,210 Miscellaneous $ 900 $ 0.10 In
November, the pizzeria budgeted for 2,070 pizzas at an average
selling price of $16 per pizza and for 230 deliveries. Data
concerning the pizzeria’s actual results in November appear below:
Actual Results Pizzas 2,170 Deliveries 210 Revenue $ 35,440 Pizza
ingredients $ 10,270 Kitchen staff $ 6,190 Utilities $ 970 Delivery
person $ 588 Delivery vehicle $ 1,020 Equipment depreciation $ 536
Rent $ 2,210 Miscellaneous $ 892 Required: 1. 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 |
|
Flexible Budget Performance Report |
|
For the Month Ended November 30 |
|
|
Actual Results |
|
Flexible Budget |
|
Planning Budget |
|
Pizzas |
2,170 |
|
|
|
|
|
|
|
Deliveries |
210 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Revenue |
$35,440 |
|
|
|
|
|
|
|
Expenses: |
|
|
|
|
|
|
|
| Pizza ingredients |
10,270 |
|
|
|
|
|
|
| Kitchen staff |
6,190 |
|
|
|
|
|
|
|
Utilities |
970 |
|
|
|
|
|
|
| Delivery
person |
588 |
|
|
|
|
|
|
| Delivery
vehicle |
1,020 |
|
|
|
|
|
|
| Equipment
depreciation |
536 |
|
|
|
|
|
|
| Rent |
2,210 |
|
|
|
|
|
|
| Miscellaneous |
892 |
|
|
|
|
|
|
| Total expense |
22,676 |
|
|
|
|
|
|
| Net operating income |
$12,764 |
|