ilano Pizza is a small neighborhood pizzeria that has a small area for in-store
ID: 2523908 • Letter: I
Question
ilano Pizza is a small neighborhood pizzeria that has a small area for in-store dining as well as offering take-out and free home elivery services. The pizzeria's owner has determined that the shop has two major cost drivers-the number of pizzas sold and the umber of deliveries made he pizzeria's cost formulas appear below: Fixed Cost per Month Cost per Delivery Cost per Pizza $ 4.60 Pizza ingredients Kitchen staff Utilities Delivery person Delivery vehicle Equipment depreciation Rent Miscellaneous $5,950 $ 630 $0.50 $3.30 $1.70 $ 650 $ 416 $1,910 $ 750 $ 0.25 n November, the pizzeria budgeted for 1,620 pizzas at an average selling price of $17 per pizza and for 240 deliveries ata concerning the pizzeria's actual results in November appear below: Actual Results Pizzas Deliveries 1,720 220 Revenue Pizza ingredients Kitchen staff Utilities Delivery person Delivery vehicle Equipment depreciation Rent Miscellaneous $ 29,810 $ 7,570 $ 5,890 $895 $ 726 $990 $416 $ 1,910 $ 802Explanation / Answer
Planning budget 1,620 240 cost Cost per amount fixed cost per pizza Delvery pizza ingredients 4.6 7452 Kitchen staff 5,950 5,950 Utilities 630 0.5 1440 Delivery person 3.3 792 delivery vehicle 650 1.7 1058 Equipment depreciation 416 416 Rent 1,910 1,910 Miscellaneous 750 0.25 1155 20173 Flexible budget 1,720 220 cost Cost per amount fixed cost per pizza Delvery pizza ingredients 4.6 7912 Kitchen staff 5,950 5,950 Utilities 630 0.5 1490 Delivery person 3.3 726 delivery vehicle 650 1.7 1024 Equipment depreciation 416 416 Rent 1,910 1,910 Miscellaneous 750 0.25 1180 20608 Flexible Budget Performance Report Actual results Revenue & spending Flexible Activity variance Planning Variaance budget Budget Pizzas 1,720 1,720 1,620 Deliveries 220 220 240 Revenue 29,810 570 F 29240 1700 F 27540 Expenses: pizza ingredients 7,570 342 F 7912 460 U 7452 Kitchen staff 5,890 60 F 5,950 0 N 5,950 Utilities 895 595 F 1490 50 U 1440 Delivery person 726 0 N 726 66 F 792 delivery vehicle 990 34 F 1024 34 F 1058 Equipment depreciation 416 0 N 416 0 N 416 Rent 1,910 0 N 1,910 0 N 1,910 Miscellaneous 802 378 F 1180 25 U 1155 total expense 19,199 1,409 F 20608 435 U 20173 net operating income 10,611 1,979 F 8632 1265 F 7367
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