Part 2. Problems. There are three problems and one bonus problem. Each one is worth the score indicated next to the problem number. Show all work for complete credit. You may attach extra pages if you so desire. Please be NEAT when writing your answers. I cannot grade illegible answers. (30 points possible) 1. (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) Formula Revenue Cost of ingredients Rent Utilities Salaries Miscellaneous S14.15q $4.60q $2,050 S300+S0.15q S6,000 $500+ S.65q Actual results for February appear below. Prepare a flexible budget performance report for the pizzeria for February for 1,300 pizzas. S18,500 6,100 2,050 608 6,200 1,050 Revenue Cost of ingredients Rent Utilities Salaries Miscellaneous Required a. Prepare a budget for 1,400 pizzas (this is the planning budget). b. Prepare a budget for 1,300 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 budget. Also indicate whether the variance is favorable or unfavorable. Actual Revenue & Flexible Activity Results Spending Budget Variances Actual Units Planning Budget Variances Revenue Expenses Cost of ingredients Rent Utilities Salaries Miscellaneous Total expenses Net operating income