Please help me with these two questions thank you so much Milano Pizza is a smal
ID: 2474132 • Letter: P
Question
Please help me with these two questions thank you so much
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. Data concerning the pizzeria’s costs appear below:
Fixed Cost
per Month
Cost per
Pizza
Cost per
Delivery
Pizza ingredients
$
4.40
Kitchen staff
$
6,350
Utilities
$
830
$
0.50
Delivery person
$
3.30
Delivery vehicle
$
850
$
1.40
Equipment depreciation
$
576
Rent
$
2,310
Miscellaneous
$
950
$
0.25
In November, the pizzeria budgeted for 2,220 pizzas at an average selling price of $21 per pizza and for 200 deliveries.
Data concerning the pizzeria’s operations in November appear below:
Actual
Results
Pizzas
2,320
Deliveries
180
Revenue
$
49,490
Pizza ingredients
$
11,170
Kitchen staff
$
6,290
Utilities
$
995
Delivery person
$
594
Delivery vehicle
$
1,030
Equipment depreciation
$
576
Rent
$
2,310
Miscellaneous
$
922
Required:
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.)
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3.. The St. Lucia Blood Bank, a private charity partly supported by government grants, is located on the Caribbean island of St. Lucia. The blood bank has just finished its operations for September, which was a particularly busy month due to a powerful hurricane that hit neighboring islands causing many injuries. The hurricane largely bypassed St. Lucia, but residents of St. Lucia willingly donated their blood to help people on other islands. As a consequence, the blood bank collected and processed over 20% more blood than had been originally planned for the month.
A report prepared by a government official comparing actual costs to budgeted costs for the blood bank appears below. Continued support from the government depends on the blood bank’s ability to demonstrate control over its costs.
St. Lucia Blood Bank
Cost Control Report
For the Month Ended September 30
Actual Results
Planning Budget
Variances
Liters of blood collected
680
500
Medical supplies
$
7,971
$
5,825
$
2,146
U
Lab tests
9,409
7,225
2,184
U
Equipment depreciation
1,710
1,500
210
U
Rent
1,100
1,100
0
Utilities
336
310
26
U
Administration
14,135
13,950
185
U
Total expense
$
34,661
$
29,910
$
4,751
U
The managing director of the blood bank was very unhappy with this report, claiming that his costs were higher than expected due to the emergency on the neighboring islands. He also pointed out that the additional costs had been fully covered by payments from grateful recipients on the other islands. The government official who prepared the report countered that all of the figures had been submitted by the blood bank to the government; he was just pointing out that actual costs were a lot higher than promised in the budget.
The following cost formulas were used to construct the planning budget:
Medical supplies
$11.65q
Lab tests
$14.45q
Equipment depreciation
$1,500
Rent
$1,100
Utilities
$310
Administration
$13,000 + $1.90q
Required:
1
.
Complete the performance report for September using the flexible budget approach. (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. Do not round intermediate calculations and round your final answers to nearest whole dollar.)
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. Data concerning the pizzeria’s costs appear below:
Explanation / Answer
Milano Pizza Flexible Budget Performance Report For the month ended November 30 Particulars Actual Results Revenue and Spending Variance Flexible Budget Activity Variance Planning Budget No of Pizzas Sold 2,320 2320 2220 No of Deliveries 180 180 200 Revenue 49490 770 F 48720 2100 F 46620 Expenses Variable Expenses Pizza ingredients 11,170 962 U 10208 440 U 9768 (2320 * 4.4 Per Pizza) Delivery person 594 0 - 594 66 F 660 (180 * 3.3 Per devilvery) Delivery vehicle 1030 72 F 1102 28 F 1130 (180 * 1.4 Per devilvery)+850 Utilities 995 995 F 1990 50 U 1940 (2320 * 4.4 Per Pizza)+830) Fixed Expenses Kitchen staff 6,290 60 F 6350 0 - 6350 Equipment depreciation 576 0 - 576 0 - 576 Rent 2310 0 - 2310 0 - 2310 Miscellaneous 922 608 F 1530 25 U 1505 (2320 * 0.25 Per Pizza)+950) Total Expenses 23,887 773 F 24,660 421 U 24,239 Net Operating Income 25,603 1543 F 24,060 1679 F 22,381 Note that the activity variances appear between the planning budget and the flexible budget and that the revenue and spending variances appear between the flexible budget and the actual results.
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