MAano pizza Is a smal neighborhood pizzeria has a smal area for in- store dining

Question

MAano pizza Is a smal neighborhood pizzeria has a smal area for in- store dining as woll as offlering 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 conceming the pizzeria's oosts appear below: Fboed Cost Cost per Cost per per Month Ptzza Dellvery Pzza Ingredlents.. $5.220 $380 Utitties Delivery person.... Delivery vehicle $630$0.05 $3.50 $1.50 $540 $275 $1,830 $820 o.15 In November, the pizzeria budgeted for 1,200 pizzas at an average selling price of $13.50 per pizza and for 180 deliveries Data concerning the pizzeria's operations in November appear below Actual Results Pizzas Deliveries Revenue. 1,240 174 $17.420 $4,985 $5,281 $984 $609 $655 $275 $1.830 $954 Pizza Ingredients Kitchen staff. Utilities Delivery person. Delivery vehicle Equipment depreciation Rent Miscellaneous Required 1. Prepare a flexible budget performance report that shows both revenue and spending variances and activity variances for the pizzeria for November

Explanation / Answer

Flexible Budget Units of Pizza 1200 1240 Revenue 1200*13.50 = 16200 17420 Cost: Ingredients 4560 4985 Kitchen Staff 5220 5281 Utilities Fixed : 630 Variable : 1200*.05 = 60 = 690 984 Delivery Person 180*3.5 = 630 609 Delivery Vehicle Fixed: 540,Variable : 270 655 Depreciation 275 275 Rent 1830 1830 Miscellenous Fixed : 820 Variable : 180 954 Net Benefit 1185 1847

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