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 drivers—the number of pizzas sold and the number of deliveries made. Data concerning the pizzeria’s costs appear below:


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 . . . . . . . . . . . . . . . . . . . . . . . . . 1,240
Deliveries . . . . . . . . . . . . . . . . . . . . . . . 174
Revenue . . . . . . . . . . . . . . . . . . . . . . . $ 17,420
Pizza ingredients . . . . . . . . . . . . . . . . .$ 4,985
Kitchen staff . . . . . . . . . . . . . . . . . . . .$ 5,281
Utilities . . . . . . . . . . . . . . . . . . . . . . . . $ 984
Delivery person . . . . . . . . . . . . . . . . . .$ 609
Delivery vehicle . . . . . . . . . . . . . . . . . $ 655
Equipment depreciation . . . . . . . . . . . $ 275
Rent . . . . . . . . . . . . . . . . . . . . . . . . . . .$ 1,830
Miscellaneous . . . . . . . . . . . . . . . . . . . $ 954

Required:
1. Prepare a flexible budget performance report that shows both revenue and spending variances and activity variances for the pizzeria for November.
2. Explain the activityvariances.


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  • CreatedMay 20, 2014
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