Actual results for february appear below prepare a flexible

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Reference no: EM13568356

Pie Guys pizzeria is owned and operated by three brothers. Data concerning the pizzeria's monthly revenues and costs appear below (q refers to the number of pizzas served)

	Formula
Revenue	$14q
cost of ingredients	$3.50q
rent	$2,500
utilities	$600+ $0.20q
wages	$7,500
miscellaneous	$300+ $.50q

Actual results for February appear below. Prepare a flexible budget performance report for the pizzeria for February for 1,200 pizzas.

revenue	$17,000
cost of ingredients	4,150
rent	2,500
utilities	908
wages	7,600
miscellaneous	850

Required:

prepare a budget for 1,300 pizzas (this is the static budget).
prepare a budget for 1,200 pizzas (this is the flexible budget).
Compute the activity variances between the two budgets and revenue/spending variances between the actual data and the flexible budget. Also indicate whether the variance is favorable or unfavorable.

Reference no: EM13568356

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