Francisco de Modenza operates a taco truck in Los Angeles, California. The truck operates on a monthly schedule that specifies the location it will serve for both lunch and dinner and for (relatively rarely) brunch. The lunch locations have been dependably busy even during the pandemic. However, some of the evening locations have become quite isolated and the number of customers fell off dramatically. For this reason, Franci has been trying out new locations. Following is the flexible budget analysis of the results of operations for the month of March. Rate Activity Base Flexible Budget Actual Variance % Locations 46 43 3 U 6.5% Customers 63 location 2709 2931 222 F 8.2% Miles driven 10.50 location 452 493 42 U 9.2% Meals served 2.75 customer 8,060 8,936 876 F 10.9% Revenue $7.65 meal 68,360 64,870 3,490 U 5.1% Food cost Labour $3.80 meal $25.00 location 33,957 1,075 31,860 1,058 2,097 F 6.2% 17 F 1.6% Gas 0.55 miles driven 271 280 9 U 3.3% Depreciation on truck 2,500 2,530 30 U 1.2% Use the information in the flexible budget to evaluate the choice of new locations for the month of March. Should these locations continue to be served or should Franci look for other places to operate his truck?
Francisco de Modenza operates a taco truck in Los Angeles, California. The truck operates on a monthly schedule that specifies the location it will serve for both lunch and dinner and for (relatively rarely) brunch. The lunch locations have been dependably busy even during the pandemic. However, some of the evening locations have become quite isolated and the number of customers fell off dramatically. For this reason, Franci has been trying out new locations. Following is the flexible budget analysis of the results of operations for the month of March. Rate Activity Base Flexible Budget Actual Variance % Locations 46 43 3 U 6.5% Customers 63 location 2709 2931 222 F 8.2% Miles driven 10.50 location 452 493 42 U 9.2% Meals served 2.75 customer 8,060 8,936 876 F 10.9% Revenue $7.65 meal 68,360 64,870 3,490 U 5.1% Food cost Labour $3.80 meal $25.00 location 33,957 1,075 31,860 1,058 2,097 F 6.2% 17 F 1.6% Gas 0.55 miles driven 271 280 9 U 3.3% Depreciation on truck 2,500 2,530 30 U 1.2% Use the information in the flexible budget to evaluate the choice of new locations for the month of March. Should these locations continue to be served or should Franci look for other places to operate his truck?
Chapter1: Financial Statements And Business Decisions
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![Francisco de Modenza operates a taco truck in Los Angeles, California. The truck operates on a monthly schedule that specifies the location it will serve
for both lunch and dinner and for (relatively rarely) brunch. The lunch locations have been dependably busy even during the pandemic. However, some
of the evening locations have become quite isolated and the number of customers fell off dramatically. For this reason, Franci has been trying out new
locations.
Following is the flexible budget analysis of the results of operations for the month of March.
Rate Activity Base Flexible Budget
Actual
Variance
Locations
46
43
3 U
6.5%
Customers
63 location
2709
2931
222 F
8.2%
Miles driven
Meals served
10.50 location
452
493
42 U
9.2%
2.75 customer
8,060
8,936
876 F
10.9%
Revenue
$7.65 meal
68,360
64,870
3,490 U
5.1%
Food cost
$3.80 meal
2,097 F
31,860
1,058
33.957
6.2%
Labour
$25.00 location
1,075
17 F
1.6%
Gas
0.55 miles driven
271
280
9 U
3.3%
Depreciation on truck
2,500
2,530
30 U
1.2%
Use the information in the flexible budget to evaluate the choice of new locations for the month of March. Should these locations continue to be served
or should Franci look for other places to operate his truck?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F57a3d338-de20-4ea6-aab9-3f01357cec02%2F39f2366c-2244-4dec-ac12-96e7cc3e602f%2Fgp3jbxb_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Francisco de Modenza operates a taco truck in Los Angeles, California. The truck operates on a monthly schedule that specifies the location it will serve
for both lunch and dinner and for (relatively rarely) brunch. The lunch locations have been dependably busy even during the pandemic. However, some
of the evening locations have become quite isolated and the number of customers fell off dramatically. For this reason, Franci has been trying out new
locations.
Following is the flexible budget analysis of the results of operations for the month of March.
Rate Activity Base Flexible Budget
Actual
Variance
Locations
46
43
3 U
6.5%
Customers
63 location
2709
2931
222 F
8.2%
Miles driven
Meals served
10.50 location
452
493
42 U
9.2%
2.75 customer
8,060
8,936
876 F
10.9%
Revenue
$7.65 meal
68,360
64,870
3,490 U
5.1%
Food cost
$3.80 meal
2,097 F
31,860
1,058
33.957
6.2%
Labour
$25.00 location
1,075
17 F
1.6%
Gas
0.55 miles driven
271
280
9 U
3.3%
Depreciation on truck
2,500
2,530
30 U
1.2%
Use the information in the flexible budget to evaluate the choice of new locations for the month of March. Should these locations continue to be served
or should Franci look for other places to operate his truck?
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