Question: Problem 9-21 More Than One Cost Driver [LO9-2, LO 9-3, LO 9-4, LO9-5] Milano Pizza is a small neighborhood pizzeria that has a small area
Problem 9-21 More Than One Cost Driver [LO9-2, LO 9-3, LO 9-4, LO9-5]
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 pizzerias owner has determined that the shop has two major cost driversthe number of pizzas sold and the number of deliveries made.
The pizzerias cost formulas appear below:
| fixed cost per month | cost per pizza | cost per delivery | |
| pizza ingredients | $4.10 | ||
| kitchen staff | $6,070 | ||
| utilities | $690 | $.10 | |
| delivery person | $2.90 | ||
| delivery vehicle | $710 | $2.30 | |
| equipment depreciation | $464 | ||
| rent | $2,030 | ||
| miscellaneous | $810 | $.05 |
In November, the pizzeria budgeted for 1,800 pizzas at an average selling price of $15 per pizza and for 220 deliveries.
Data concerning the pizzerias actual results in November appear below:
| Actual Results | |||
| Pizzas | 1,900 | ||
| Deliveries | 200 | ||
| Revenue | $ | 29,130 | |
| Pizza ingredients | $ | 8,650 | |
| Kitchen staff | $ | 6,010 | |
| Utilities | $ | 925 | |
| Delivery person | $ | 580 | |
| Delivery vehicle | $ | 1,002 | |
| Equipment depreciation | $ | 464 | |
| Rent | $ | 2,030 | |
| Miscellaneous | $ | 838 | |
| Required: 1. Complete the flexible budget performance report that shows both revenue and spending variances and activity variances for the pizzeria for November. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.) | |||
Required 1. Complete the flexible budget performance report that shows both revenue and spending variances and activity variances for the effect (i.e., zero variance). Input all amounts as positive values.) pizzeria for November. (Indicate the effect of each variance by selecting "Fi" for favorable, "U" for unfavorable, and "None" for no Milano Pizza Flexible Budget Performance Report For the Month Ended November 30 Actual Results Flexible Budget Planning Budget Pizzas 1,900 Deliveries 200 Revenue $ 29,130 Expenses Pizza ingredients Kitchen staff Utilities Delivery person Delivery vehicle Equipment depreciation Rent Miscellaneous 8,650 6,010 925 580 1,002 464 2,030 Total expense Net operating income 838 20,499 $8,631
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