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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. Data concerning the pizzeria’s costsappear below:

1) Complete the flexible budget performance report that showsboth revenue and spending variances and activity variances for thepizzeria for November.   

Fixed Cost
per Month		Cost per
Pizza		Cost per
Delivery
  Pizza ingredients$4.20   
  Kitchen staff$6,310   
  Utilities$810   $0.30   
  Delivery person$3.10   
  Delivery vehicle$830   $1.20   
  Equipment depreciation$560   
  Rent$2,270   
  Miscellaneous$930   $0.15   

  

       In November, thepizzeria budgeted for 2,160 pizzas at an average selling price of$19 per pizza and for 180 deliveries.
       Data concerning thepizzeria’s operations in November appear below:

  

Actual
Results
  Pizzas2,260  
  Deliveries160  
  Revenue$43,690  
  Pizza ingredients$10,810  
  Kitchen staff$6,250  
  Utilities$985  
  Delivery person$496  
  Delivery vehicle$1,026  
  Equipment depreciation$560  
  Rent$2,270  
  Miscellaneous$910  

Answer & Explanation Solved by verified expert
4.4 Ratings (644 Votes)

Milano Pizza
Flexible Budget Report
For the month ended November 30
Actual results Revenue and Spending Variances Flexible Budget Activity Variance Planning Budget
Pizzas x 2260 2260 2160
Deliveries y 160 160 180
Revenue ($19* x) $ 43,690 $     750 F $ 42,940 $1,900 F $ 41,040
Expenses: $ 10,810
Pizza ingredients ($4.20 * x) $   6,250 $ 3,242 F $    9,492 $    420 U $   9,072
Kitchen staff $                    6,310 $   6,250 $       60 F $    6,310 $       -   None $   6,310
Utilities ($810 + $0.30 * x) $       985 $     503 F $    1,488 $      30 U $   1,458
Delivery Person ($3.10* y) $       496 $        -   None $        496 $      62 F $       558
Delivery Vehicle ($830 + $1.20 * y) $   1,026 $         4 U $    1,022 $      24 F $   1,046
Equipment depreciation $                        560 $       560 $        -   None $        560 $       -   None $       560
Rent $                    2,270 $   2,270 $        -   None $    2,270 $       -   None $   2,270
Miscellaneous ($930 + $0.15 * x) $       910 $     359 F $    1,269 $      15 U $   1,254
Total expense $ 18,747 $ 4,160 F $ 22,907 $    379 U $ 22,528
Net operating income $ 24,943 $ 4,910 F $ 20,033 $1,521 F $ 18,512

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