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Milano Pizza is a small neighborhood pizzeria that has a small area for in-store dining as...

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Accounting

Milano Pizza is a small neighborhood pizzeria that has a smallarea for in-store dining as well as offering take-out and free homedelivery services. The pizzeria’s owner has determined that theshop has two major cost drivers—the number of pizzas sold and thenumber of deliveries made.

The pizzeria’s cost formulas appear below:

Fixed Cost
per Month		Cost per
Pizza		Cost per
Delivery
Pizza ingredients$4.80
Kitchen staff$6,210
Utilities$760$0.80
Delivery person$2.60
Delivery vehicle$780$1.80
Equipment depreciation$520
Rent$2,170
Miscellaneous$880$0.20

  

In November, the pizzeria budgeted for 2,010 pizzas at anaverage selling price of $14 per pizza and for 210 deliveries.

Data concerning the pizzeria’s actual results in November appearbelow:

  

Actual Results
Pizzas2,110
Deliveries190
Revenue$30,240
Pizza ingredients$9,910
Kitchen staff$6,150
Utilities$960
Delivery person$494
Delivery vehicle$1,016
Equipment depreciation$520
Rent$2,170
Miscellaneous$880

Required:

1. Compute the revenue and spending variances for the pizzeriafor November. (Indicate the effect of each variance byselecting "F" for favorable, "U" for unfavorable, and "None" for noeffect (i.e., zero variance). Input all amounts as positivevalues.)

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