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 Cost per Pizza Cost per Delivery Pizza ingredients   $ 4.60   Kitchen staff $ 5,950     Utilities $ 630 $ 0.50   Delivery person     $ 3.30 Delivery vehicle $ 650   $ 1.70 Equipment depreciation $ 416     Rent $ 1,910     Miscellaneous $ 750 $ 0.25      In November, the pizzeria budgeted for 1,620 pizzas at an average selling price of $17 per pizza and for 240 deliveries.   Data concerning the pizzeria’s actual results in November appear below:      Actual Results Pizzas 1,720 Deliveries 220 Revenue $ 29,810 Pizza ingredients $ 7,570 Kitchen staff $ 5,890 Utilities $ 895 Delivery person $ 726 Delivery vehicle $ 990 Equipment depreciation $ 416 Rent $ 1,910 Miscellaneous $ 802   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 Pizzas 1,720       Deliveries 220       Revenue $29,810       Expenses:         Pizza ingredients 7,570       Kitchen staff 5,890       Utilities 895       Delivery person 726       Delivery vehicle 990       Equipment depreciation 416       Rent 1,910       Miscellaneous 802       Total expense 19,199       Net operating income $10,611

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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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 Cost per Pizza Cost per Delivery
Pizza ingredients   $ 4.60  
Kitchen staff $ 5,950    
Utilities $ 630 $ 0.50  
Delivery person     $ 3.30
Delivery vehicle $ 650   $ 1.70
Equipment depreciation $ 416    
Rent $ 1,910    
Miscellaneous $ 750 $ 0.25  

  

In November, the pizzeria budgeted for 1,620 pizzas at an average selling price of $17 per pizza and for 240 deliveries.

 

Data concerning the pizzeria’s actual results in November appear below:

  

  Actual Results
Pizzas 1,720
Deliveries 220
Revenue $ 29,810
Pizza ingredients $ 7,570
Kitchen staff $ 5,890
Utilities $ 895
Delivery person $ 726
Delivery vehicle $ 990
Equipment depreciation $ 416
Rent $ 1,910
Miscellaneous $ 802

 

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
Pizzas 1,720      
Deliveries 220      
Revenue $29,810      
Expenses:        
Pizza ingredients 7,570      
Kitchen staff 5,890      
Utilities 895      
Delivery person 726      
Delivery vehicle 990      
Equipment depreciation 416      
Rent 1,910      
Miscellaneous 802      
Total expense 19,199      
Net operating income $10,611
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