Question

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 $ 4.10 Kitchen staff $ 6,290 Utilities $ 800 $ 0.20 Delivery person $ 3.00 Delivery vehicle $ 820 $ 2.20 Equipment depreciation $ 552 Rent $ 2,250 Miscellaneous $ 920 $ 0.10 In November, the pizzeria budgeted for 2,130 pizzas at an average selling price of $18 per pizza and for 250 deliveries. Data concerning the pizzeria’s actual results in November appear below: Actual Results Pizzas 2,230 Deliveries 230 Revenue $ 40,880 Pizza ingredients $ 10,630 Kitchen staff $ 6,230 Utilities $ 980 Delivery person $ 690 Delivery vehicle $ 1,024 Equipment depreciation $ 552 Rent $ 2,250 Miscellaneous $ 904

Answer 1