Milano Pizza is a small neighborhood pizzeria that has a small area for in-store dining as well as offering take-out ar home delivery services. The pizzeria's owner has determined that the shop has two major cost drivers-the number sold and the number of deliveries made. The pizzeria's cost formulas appear below: Fixed Cost per Cost per Month Pizza Pizza ingredients Kitchen staff Utilities Delivery person Delivery vehicle Equipment depreciation Rent Miscellaneous $ 6,210 $ 760 $ 780 $ 520 $ 2,170 $ 880 $ 4.80 $ 0.80 $ 0.20 Cost per Delivery $ 2.60 $ 1.80 In November, the pizzeria budgeted for 2,010 pizzas at an average selling price of $14 per pizza and for 210 del
Milano Pizza is a small neighborhood pizzeria that has a small area for in-store dining as well as offering take-out ar home delivery services. The pizzeria's owner has determined that the shop has two major cost drivers-the number sold and the number of deliveries made. The pizzeria's cost formulas appear below: Fixed Cost per Cost per Month Pizza Pizza ingredients Kitchen staff Utilities Delivery person Delivery vehicle Equipment depreciation Rent Miscellaneous $ 6,210 $ 760 $ 780 $ 520 $ 2,170 $ 880 $ 4.80 $ 0.80 $ 0.20 Cost per Delivery $ 2.60 $ 1.80 In November, the pizzeria budgeted for 2,010 pizzas at an average selling price of $14 per pizza and for 210 del
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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
Pizza ingredients
Kitchen staff
Utilities
Delivery person
Delivery vehicle
Equipment depreciation
Rent
Miscellaneous
$ 6,210
$ 760
Pizzas
Deliveries
Revenue
Pizza ingredients
Kitchen staff
Utilities
Delivery person
Delivery vehicle
Equipment depreciation
Rent
Miscellaneous
$ 780
$ 520
$ 2,170
$ 880
Actual
Results
2,110
190
$ 30,240
$ 9,910
$ 6,150
$ 960
$ 494
1,016
$ 520
$ 2,170
$ 880
Cost per
Pizza
$ 4.80
$ 0.80
$
$ 0.20
In November, the pizzeria budgeted for 2,010 pizzas at an average selling price of $14 per pizza and for 210 deliveries.
Data concerning the pizzeria's actual results in November appear below:
cost per
Delivery
$ 2.60
$ 1.80
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.)
Milano Pizza
Revenue and Spending Variances
For the Month Ended November 30
Actual
Results
Revenue and Spending
Variances
Flexible
Budget](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fea0f96c4-bd6a-49c6-acb0-1c70d4ff7b08%2F40159e2f-ba6b-4717-bb71-379ab1aaac93%2Fixzdfwj_processed.png&w=3840&q=75)
Transcribed Image Text: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
Pizza ingredients
Kitchen staff
Utilities
Delivery person
Delivery vehicle
Equipment depreciation
Rent
Miscellaneous
$ 6,210
$ 760
Pizzas
Deliveries
Revenue
Pizza ingredients
Kitchen staff
Utilities
Delivery person
Delivery vehicle
Equipment depreciation
Rent
Miscellaneous
$ 780
$ 520
$ 2,170
$ 880
Actual
Results
2,110
190
$ 30,240
$ 9,910
$ 6,150
$ 960
$ 494
1,016
$ 520
$ 2,170
$ 880
Cost per
Pizza
$ 4.80
$ 0.80
$
$ 0.20
In November, the pizzeria budgeted for 2,010 pizzas at an average selling price of $14 per pizza and for 210 deliveries.
Data concerning the pizzeria's actual results in November appear below:
cost per
Delivery
$ 2.60
$ 1.80
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.)
Milano Pizza
Revenue and Spending Variances
For the Month Ended November 30
Actual
Results
Revenue and Spending
Variances
Flexible
Budget
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