Reference no: EM132568949
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 $4.70
Kitchen staff$6,190
Utilities$750 $0.70
Delivery person $3.50
Delivery vehicle$770 $1.70
Equipment depreciation$512
Rent$2,150
Miscellaneous$870 $0.10
In November, the pizzeria budgeted for 1,980 pizzas at an average selling price of $13 per pizza and for 200 deliveries.
Data concerning the pizzeria's actual results in November appear below:
Actual Results
Pizzas 2,080
Deliveries 180
Revenue $27,730
Pizza ingredients $9,730
Kitchen staff $6,130
Utilities $955
Delivery person $630
Delivery vehicle $1,014
Equipment depreciation $512
Rent $2,150
Miscellaneous $874
Required:
Question 1: Complete the flexible budget performance report that shows both revenue and spending variances and activity 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.)