Please help me (8 points) Pie Guys Pizzeria is owned and operated by three broth

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Please help me

(8 points) Pie Guys Pizzeria is owned and operated by three brothers. Data concerning the pizzeria's monthly revenues and costs appear below (q refers to the number of pizzas served): 1. Eormula $13.75q S4.15q $2,050 $400 +S0.15q $7,000 $700 $.65q Revenue Cost of ingredients Rent Utilities Salaries Miscellaneous Actual results for February appear below. Prepare a flexible budget performance report for the pizzeria for February for 1,200 pizzas. Revenue Cost of ingredients Rent Utilities Salaries Miscellaneous $16,500 4,900 2,100 708 7,200 850 Required: a. Prepare a budget for 1,300 pizzas (this is the static budget). b. Prepare a budget for 1,200 pizzas (this is the flexible budget). c. Compute the activity variances between the two budgets and revenue/spending variances between the actual data and the flexible bu Also indicate whether the variance is favorable or unfavorable.

Explanation / Answer

a) Static Budget Pizzas 1300 Revenue 17875 (13.75*1300) Expenses: Cost of ingredients 5395 (1300*4.15) Rent 2050 Utilities 595 (400+(1300*0.15)) Salaries 7000 Miscellaneous 1545 (700+(1300*0.65)) Total expenses 16585 Net Operating Income 1290 b) Flexible Budget Pizzas 1200 Revenue 16500 (13.75*1200) Expenses: Cost of ingredients 4980 (1200*4.15) Rent 2050 Utilities 580 (400+(1200*0.15)) Salaries 7000 Miscellaneous 1480 (700+(1200*0.65)) Total expenses 16090 Net Operating Income 410 c) Static Budget Activity Varaince F/U Flexible Budget Spending Variance F/U Actual Results Pizzas 1300 1200 1200 Revenue 17875 1375 F 16500 0 16500 Expenses: Cost of ingredients 5395 415 F 4980 80 F 4900 Rent 2050 0 2050 -50 U 2100 Utilities 595 15 F 580 -128 U 708 Salaries 7000 0 7000 -200 U 7200 Miscellaneous 1545 65 F 1480 630 F 850 Total expenses 16585 495 F 16090 332 F 15758 Net Operating Income 1290 -880 U 410 332 F 742

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