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 $ 4.70 Kitchen staff $ 5,970 Utilities $ 640 $ 0.60 Delivery person $ 3.40 Delivery vehicle $ 660 $ 1.80 Equipment depreciation $ 424 Rent $ 1,930 Miscellaneous $ 760 $ 0.06 In November, the pizzeria budgeted for 1,650 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 1,750 Deliveries 230 Revenue $ 32,080 Pizza ingredients $ 7,750 Kitchen staff $ 5,910 Utilities $ 900 Delivery person $ 782 Delivery vehicle $ 992 Equipment depreciation $ 424 Rent $ 1,930 Miscellaneous $ 808 Required: 1. Compute the revenue and spending 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.) Brewer_8e_Rechecks_2019_10_17

Answer 1

Answer is given below