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. Data concerning the pizzeria’s costs appear below: Fixed cost per month Cost per Pizza Cost per delivery Pizza ingredients . . . . . . . . . $3.80 Kitchen staff . . . . . . . . . . . . $5,220 Utilities . . . . . . . . . . . . . . . . $630 $0.05 Delivery person . . . . . . . . . . $3.50 Delivery vehicle . . . . . . . . . . $540 $1.50 Equipment depreciation . . . $275 Rent . . . . . . . . . . . . . . . . . . $1,830 Miscellaneous . . . . . . . . . . . $820 $0.15 In November, the pizzeria budgeted for 1,200 pizzas at an average selling price of $13.50 per pizza and for 180 deliveries. Data concerning the pizzeria’s operations in November appear below: Actual Results Pizzas . . . . . . . . . . . . . . . . . . . 1,240 Deliveries . . . . . . . . . . . . . . . . 174 Revenue . . . . . . . . . . . . . . . . . $17,420 Pizza ingredients . . . . . . . . . . $4,985 Kitchen staff . . . . . . . . . . . . . . $5,281 Utilities . . . . . . . . . . . . . . . . . . $984 Delivery person . . . . . . . . . . . $609 Delivery vehicle . . . . . . . . . . . $655 Equipment depreciation . . . . . $275 Rent . . . . . . . . . . . . . . . . . . . . $1,830 Miscellaneous . . . . . . . . . . . . $954 Required: Prepare a flexible budget performance report that shows both activity variances and revenue and spending variances for the pizzeria for November.
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. Data concerning the pizzeria’s costs appear below:
Fixed cost per month Cost per Pizza Cost per delivery
Pizza ingredients . . . . . . . . . $3.80
Kitchen staff . . . . . . . . . . . . $5,220
Utilities . . . . . . . . . . . . . . . . $630 $0.05
Delivery person . . . . . . . . . . $3.50
Delivery vehicle . . . . . . . . . . $540 $1.50
Equipment
Rent . . . . . . . . . . . . . . . . . . $1,830
Miscellaneous . . . . . . . . . . . $820 $0.15
In November, the pizzeria budgeted for 1,200 pizzas at an average selling price of $13.50 per pizza and for 180 deliveries. Data concerning the pizzeria’s operations in November appear below:
Actual Results
Pizzas . . . . . . . . . . . . . . . . . . . 1,240
Deliveries . . . . . . . . . . . . . . . . 174
Revenue . . . . . . . . . . . . . . . . . $17,420
Pizza ingredients . . . . . . . . . . $4,985
Kitchen staff . . . . . . . . . . . . . . $5,281
Utilities . . . . . . . . . . . . . . . . . . $984
Delivery person . . . . . . . . . . . $609
Delivery vehicle . . . . . . . . . . . $655
Equipment depreciation . . . . . $275
Rent . . . . . . . . . . . . . . . . . . . . $1,830
Miscellaneous . . . . . . . . . . . . $954
Required:
Prepare a flexible budget performance report that shows both activity variances and revenue and spending variances for the pizzeria for November.
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