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 pizzes sold and the number of deliveries made. The pizzeria's cost formulas appear below. Pizza ingredients Kitchen staff Utilities Delivery person Delivery vehicle Equipment depreciation Rent Miscellaneous Fixed Cost per Month Cost per Pizza $4.00 Cost per Delivery $ 6,050 $ 680 $ 1.00 $700 $456 $ 2,010 $ 2.80 $2.20 $800 $ 0.20 In November, the pizzeria budgeted for 1,770 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. Actual Results Pizzas Deliveries Revenue 1,870 190 $26,800 Pizza ingredients $8,470 Kitchen staff $5,990 Utilities $920 Delivery person $532 Delivery vehicle $1,000 $456 $2,010 $832 Equipment depreciation Rent Miscellaneous 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 (.e., zero variance). Input all amounts as positive values.) Milano Pizza Revenue and Spending Variances For the Month Ended November 30 Pizzas Deliveries Actual Results Revenue and Spending Variances Flexible Budget 1,870 190 26,800 Revenue Expenses Pizza ingredients 8,470 Kitchen staff 5,990 Utilities 920 Delivery person 532 Delivery vehicle 1,000 Equipment depreciation 456 Rent 2,010 Miscellaneous 832 Total expense 20,210 Net operating income $ 6,590
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 pizzes sold and the number of deliveries made. The pizzeria's cost formulas appear below. Pizza ingredients Kitchen staff Utilities Delivery person Delivery vehicle Equipment depreciation Rent Miscellaneous Fixed Cost per Month Cost per Pizza $4.00 Cost per Delivery $ 6,050 $ 680 $ 1.00 $700 $456 $ 2,010 $ 2.80 $2.20 $800 $ 0.20 In November, the pizzeria budgeted for 1,770 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. Actual Results Pizzas Deliveries Revenue 1,870 190 $26,800 Pizza ingredients $8,470 Kitchen staff $5,990 Utilities $920 Delivery person $532 Delivery vehicle $1,000 $456 $2,010 $832 Equipment depreciation Rent Miscellaneous 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 (.e., zero variance). Input all amounts as positive values.) Milano Pizza Revenue and Spending Variances For the Month Ended November 30 Pizzas Deliveries Actual Results Revenue and Spending Variances Flexible Budget 1,870 190 26,800 Revenue Expenses Pizza ingredients 8,470 Kitchen staff 5,990 Utilities 920 Delivery person 532 Delivery vehicle 1,000 Equipment depreciation 456 Rent 2,010 Miscellaneous 832 Total expense 20,210 Net operating income $ 6,590
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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:
Pizza ingredients
Kitchen staff
Utilities
Delivery person
Delivery vehicle
Equipment depreciation
Rent
Miscellaneous
Fixed Cost
per Month
Cost per
Pizza
$ 4.00
Cost per
Delivery
$ 6,050
$ 680
$ 1.00
$ 2.80
$ 700
$ 2.20
$ 456
$ 2,010
$ 800
$ 0.20
In November, the pizzerie budgeted for 1,770 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:
Actual
Results
1,878
Pizzas
Deliveries
Revenue
Pizza ingredients
Kitchen staff
Utilities
Delivery person
Delivery vehicle
Equipment depreciation
Rent
Miscellaneous
Required:
198
$ 26,800
$ 8,470
$ 5,990
$ 920
$
532
$ 1,000
$ 456
$ 2,018
$ 832
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.)
Pizzas
Deliveries
Revenue
Milano Pizza
Revenue and Spending Variancee
For the Month Ended November 30
Actual
Results
Revenue and Spending
Varlances
Flexible
Budget
1,870
190
$
26,800
Expenses
Pizza ingredients
8,470
Kitchen staff
5,990
Utilities
920
Delivery person
532
Delivery vehicle
1,000
Equipment depreciation
456
Rent
2,010
Miscellaneous
832
Total expense
20,210
Net operating income
$
6,590
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