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 Pizzas Deliveries Revenue $5,930 $620 Pizza ingredients Kitchen staff Utilities Delivery person Delivery vehicle Equipment depreciation Rent Miscellaneous $640 $408 $1,890 $740 Actual Results 1,690 210 In November, the pizzeria budgeted for 1,590 pizzas at an average selling price of $16 per pizza and for 230 deliveries. Data concerning the pizzeria's actual results in November were as follows. $27,600 17.390 $5,870 $890 5672 5900 $408 Cost per Pizza $4.50 $0.40 $ 1,090 $796 $0.20 Cost per Delivery $3.20 $1.60 Required: 1. Complete the flexible budget performance report that shows both revenue and spending variances and activity variances for the pizzeria for November Note: Indicate the effect of each variance by selecting "F" for favorable. "U" for unfavorable, and "None" for no effect (i.e. zer yerin
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 Pizzas Deliveries Revenue $5,930 $620 Pizza ingredients Kitchen staff Utilities Delivery person Delivery vehicle Equipment depreciation Rent Miscellaneous $640 $408 $1,890 $740 Actual Results 1,690 210 In November, the pizzeria budgeted for 1,590 pizzas at an average selling price of $16 per pizza and for 230 deliveries. Data concerning the pizzeria's actual results in November were as follows. $27,600 17.390 $5,870 $890 5672 5900 $408 Cost per Pizza $4.50 $0.40 $ 1,090 $796 $0.20 Cost per Delivery $3.20 $1.60 Required: 1. Complete the flexible budget performance report that shows both revenue and spending variances and activity variances for the pizzeria for November Note: Indicate the effect of each variance by selecting "F" for favorable. "U" for unfavorable, and "None" for no effect (i.e. zer yerin
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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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
Pizzas
Deliveries.
Revenue
Pizza ingredients
Kitchen staff
Utilities
Pizza ingredients
Kitchen staff
Utilities
Delivery person
Delivery vehicle
Equipment depreciation
Rent
Miscellaneous
$0.20
In November, the pizzeria budgeted for 1,590 pizzas at an average selling price of $16 per pizza and for 230 deliveries.
Data concerning the pizzeria's actual results in November were as follows
Actual Results
1,690
210
$27,600
$7,390
$5,870
$890
$672
$988
$408
Delivery person
Delivery vehicle
Equipment depreciation
Rent
Miscellaneous
$5,930
$620
$640
$408
$1.890
$740
Cost per Pizza
$4.50
50.40
$1,890
$796
Cost per
Delivery
$3.20
$1.60
Required:
1. Complete the flexible budget performance report that shows both revenue and spending variances and activity variances for the pizzeria for
November
Note: Indicate the effect of each variance by selecting "F" for favorable. "U" for unfavorable, and "None" for no effect (i.e., zero variance).
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