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Chapter 9. Assignment

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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		$ 3.80
Kitchen staff	$ 5,220
Utilities	$ 630	$ 0.05
Delivery person			$ 3.50
Delivery vehicle	$ 540		$ 1.50
Equipment depreciation	$ 275
Rent	$ 1,830
Miscellaneous	$ 820	$ 0.15

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 pizzerias actual results in November were as follows:

	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. 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.)

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