Financial & Managerial Accounting
13th Edition
ISBN: 9781285866307
Author: Carl Warren, James M. Reeve, Jonathan Duchac
Publisher: Cengage Learning
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Textbook Question
Chapter 21, Problem 21.4CP
Objectives of the
Domino’s Pizza LLC. operates pizza delivery and carry-out restaurants. The annual report describes its business as follows:
We offer a focused menu of high- quality, value-priced pizza with three types of crust (Hand-Tossed. Thin Crust, and Deep Dish), along with buffalo wings, bread sticks, cheesy bread. CinnaStixâ, and Coca-Colaâ products. Our band-tossed pizza is made from fresh dough produced in our regional distribution centers. We prepare every pizza using real cheese, pizza sauce made from fresh tomatoes, and a choice of high-quality meat and vegetable toppings in generous portions. Our focused menu and use of premium ingredients enable us to consistently and efficiently produce the highest-quality pizza.
Over the 41 years since our founding, we have developed a simple, cost-efficient model, We offer a limited menu, our stores are designed for delivery and carry-out and we do not generally offer dine-in service. As a result, our stores require relatively small. lower-rent locations and limited capital expenditures.
How would a master budget support planning, directing, and control for Domino’s?
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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
Pizza ingredients
Cost per
Pizza
$ 4.00
Cost per
Delivery
Kitchen staff
$ 6,270
Utilities
Delivery person
Delivery vehicle
$ 790
$ 0.10
$ 810
$ 2.90
$ 2.10
Equipment depreciation
Rent
$ 544
$ 2,230
Miscellaneous
$ 910
$ 0.05
In November, the pizzeria budgeted for 2,100 pizzas at an average selling price of $17 per pizza and for 240 deliveries.
Data concerning the pizzeria's actual results in November were as follows:
Actual
Results
2,200
220
$ 38,130
Pizzas
Deliveries
Revenue
Kitchen staff
Pizza ingredients
$ 10,450
$ 6,210
Utilities
Delivery person
$ 975
$ 638
$ 1,022
$ 544
$ 2,230
$ 898
Delivery vehicle
Equipment depreciation
Rent…
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 MonthCost per PizzaCost per DeliveryPizza ingredients $ 4.10 Kitchen staff$ 6,290 Utilities$ 800$ 0.20 Delivery person $ 3.00Delivery vehicle$ 820 $ 2.20Equipment depreciation$ 552 Rent$ 2,250 Miscellaneous$ 920$ 0.10 In November, the pizzeria budgeted for 2,130 pizzas at an average selling price of $18 per pizza and for 250 deliveries. Data concerning the pizzeria’s actual results in November were as follows: Actual ResultsPizzas2,230Deliveries230Revenue$ 40,880Pizza ingredients$ 10,630Kitchen staff$ 6,230Utilities$ 980Delivery person$ 690Delivery vehicle$ 1,024Equipment depreciation$ 552Rent$ 2,250Miscellaneous$ 904 Required:
1.…
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
Fixed Cost
Cost per
per Month
Pizza
$ 4.50
$ 5,930
Cost per
Delivery
Kitchen staff
Utilities
Delivery person
Delivery vehicle
Equipment depreciation
Rent
Miscellaneous
$ 620
$640
$ 408
$1,890
$740
$0.40
$ 3.20
$ 0.20
$ 1.60
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 appear below.
Actual
Results
Pizzas
Deliveries
Revenue
1,690
210
Kitchen staff
Delivery person
$27,600
Pizza ingredients
$ 7,390
$ 5,870
Utilities.
$ 890
$ 672
$ 988
$ 408
$ 1,890
$ 796
Delivery vehicle
Equipment depreciation
Rent
Miscellaneous…
Chapter 21 Solutions
Financial & Managerial Accounting
Ch. 21 - Prob. 1DQCh. 21 - Briefly describe the type of human behavior...Ch. 21 - What behavioral problems are associated with...Ch. 21 - What behavioral problems are associated with...Ch. 21 - Under what circumstances would a static budget be...Ch. 21 - How do computerized budgeting systems aid firms in...Ch. 21 - Why should the production requirements Set forth...Ch. 21 - Prob. 8DQCh. 21 - A. Discuss the purpose of the cash budget. B. If...Ch. 21 - Give an example of how the capital expenditures...
Ch. 21 - Flexible budgeting At the beginning of the period,...Ch. 21 - Prob. 21.1BPECh. 21 - Prob. 21.2APECh. 21 - Prob. 21.2BPECh. 21 - Direct materials purchases budget My Life...Ch. 21 - Prob. 21.3BPECh. 21 - Direct labor cost budget MyLife Chronicles Inc....Ch. 21 - Prob. 21.4BPECh. 21 - Prob. 21.5APECh. 21 - Prob. 21.5BPECh. 21 - Prob. 21.6APECh. 21 - Prob. 21.6BPECh. 21 - Personal budget At the beginning of the 2016...Ch. 21 - Flexible budget for selling and administrative...Ch. 21 - Static budget versus flexible budget The...Ch. 21 - Prob. 21.4EXCh. 21 - Prob. 21.5EXCh. 21 - Prob. 21.6EXCh. 21 - Prob. 21.7EXCh. 21 - Prob. 21.8EXCh. 21 - Direct materials purchases budget Romano's Frozen...Ch. 21 - Prob. 21.10EXCh. 21 - Prob. 21.11EXCh. 21 - Direct labor cost budget Ace Racket Company...Ch. 21 - Prob. 21.13EXCh. 21 - Production and direct labor cost budgets Levi...Ch. 21 - Prob. 21.15EXCh. 21 - Cost of goods sold budget Delaware Chemical...Ch. 21 - Cost of goods sold budget The controller of...Ch. 21 - Schedule of cash collections of accounts...Ch. 21 - Schedule of cash collections of accounts...Ch. 21 - Schedule of cash payments for a service company...Ch. 21 - Schedule of cash payments for a service company...Ch. 21 - Capital expenditures budget On January 1, 2016,...Ch. 21 - Forecast sales volume and sales budget For 2016,...Ch. 21 - Sales, production, direct materials purchases, and...Ch. 21 - Budgeted income statement and supporting budgets...Ch. 21 - Cash budget The controller of Sonoma Housewares...Ch. 21 - Budgeted income statement and balance sheet As a...Ch. 21 - Prob. 21.1BPRCh. 21 - Sales, production, direct materials purchases, and...Ch. 21 - Budgeted income statement and supporting budgets...Ch. 21 - Cash budget The controller of Mercury Shoes Inc....Ch. 21 - Prob. 21.5BPRCh. 21 - Prob. 21.1CPCh. 21 - Prob. 21.2CPCh. 21 - Static budget for a service company A bank manager...Ch. 21 - Objectives of the master budget Dominos Pizza LLC....Ch. 21 - Integrity and evaluating budgeting systems The...
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