Questionverona pizza is a small neighborhood pizzeria that

Reference no: EM13348667

Question:

Verona Pizza is a small neighborhood pizzeria that has a little area for in-store dining as well offering takeout and free home delivery services. The pizzeria's owner has evaluated that the shop has two major cost drivers-the number of pizzas sold and the number of deliveries made. Data concerning the pizzeria's costs appear below:

Fixed Cost

per Month Cost per

Pizza Cost per

Delivery

Pizza ingredients $4.20

Kitchen staff $ 6,400

Utilities $ 540 $.10

Delivery person $2.30

Delivery vehicle $680 $1.50

Equipment depreciation $387

Rent $1,730

Miscellaneous $720 $.01

In October, the pizzeria budgeted for 1,700 pizzas at an average selling price of $13.00 per pizza and for 220 deliveries.

Data concerning the pizzeria's operations in October shown below:

Actual

Results

Pizzas 1,800

Deliveries 200

Revenue $23,940

Pizza ingredients $7,690

Kitchen staff $6,340

Utilities $845

Delivery person $460

Delivery vehicle $1,122

Equipment depreciation $387

Rent $1,730

Miscellaneous $ 730

Required:

Do the flexible budget performance report that shows both activity variances and revenue and spending variances for the pizzeria for October. (Input all amounts as positive values. Leave no cells blank - be certain to enter "0" wherever needed. Point out the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Omit the "$" sign in your response.)

Verona Pizza

Flexible Budget Performance Report

For the Month Ended October 31

Activity Variances Revenue and Spending Variances

Revenue $ $

Expenses:

Pizza ingredients

Kitchen staff

Utilities

Delivery person

Delivery vehicle

Equipment depreciation

Rent

Miscellaneous

Total expense

Net operating income $

Reference no: EM13348667

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