Problem 10-22 More than One Cost Driver [LO4, LO5] Milano Pizza is a small neigh

Question

Problem 10-22 More than One Cost Driver [LO4, LO5]

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

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

Explanation / Answer

i have a solution to same,but with different values , can adjust to arrive at the result

question
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 driversthe 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


$
1.8



Kitchen staff
$
4,620





Utilities
$
490
$
1



Delivery person




$
3.3

Delivery vehicle
$
350


$
1

Equipment depreciation
$
232





Rent
$
1,660





Miscellaneous
$
790
$
1




--------------------------------------------------------------------------------
In November, the pizzeria budgeted for 2,200 pizzas at an average selling price of $16 per pizza and for 190 deliveries.

Data concerning the pizzeria's operations in November appear below:



Actual Results

Pizzas

2,220

Deliveries

180

Revenue
$
17,200

Pizza ingredients
$
3,285

Kitchen staff
$
5,330

Utilities
$
900

Delivery person
$
430

Delivery vehicle
$
700

Equipment depreciation
$
110

Rent
$
1,820

Miscellaneous
$
920



solution

Flexed Budget Actual Variance in $ Revenue 35520 17,200 18320 U Kitchen staff 4620 5,330 710 U Utilities(W1) 670 900 430 U Delivery Person (W4) Delivery vehicle(W2) 530 700 170 F Equipment depreciation
232 110 122 F Rent
1,660 1,820 160 U Miscellaneous (W3) 970 920 50 F Working 1 utilities F.c + V.c 490 + 180 = 670 working 2 Delivery vehicle 350 + 180 =530 Working 3 Miscellaneous 790 + 180 = 970 Working 4 Delivery person 3.33 x 180 = 599.4 Activity variances Sales Volume Variance (Budgeted sales - Actual sales ) x Budgeted profit ( 2200 - 2220 ) x 9.96 199 F

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