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. The pizzeria's cost formulas appear below: Fixed Cost per Month Cost per Pizza $ 4.50 cost per Delivery $6,150 $ 730 $ 0.50 Pizza ingredients Kitchen staff Utilities Delivery person Delivery vehicle Equipment depreciation Rent Miscellaneous $3.30 $1.50 $ 750 $ 496 $2,110 $ 850 $ 0.25 In November, the pizzeria budgeted for 1,920 pizzas at an average selling price of $19 per pizza and for 180 deliveries. Data concerning the pizzeria's actual results in November appear below: Pizzas Deliveries Revenue Pizza ingredients Kitchen staff Utilities Delivery person Delivery vehicle Equipment depreciation Rent Miscellaneous Actual Results 2,020 160 $ 39,050 $ 9,370 $ 6,090 $ 945 528 $ 1,010 $ 496 $ 2,110 $ 862 Required: 1. Compute the revenue and spending 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.) Milano Pizza Revenue and Spending Variances For the Month Ended November 30 Actual Revenue and Spending Results Variances Flexible Budget 2,020 Pizzas Deliveries 160 Revenue $ 39,050 Expenses: Pizza ingredients Kitchen staff Utilities Delivery person 1 Delivery vehicle Equipment depreciation Rent 9,370 6,090 945 528 1,010 496 2,110 862 21,411 17,639 Miscellaneous Total expense Net operating income $

Answer 1

Answer-

MILANO PIZZA
Revenue & Spending Variances
For the month ended November
Particulars		Flexible Budget	Actual Results	Variances	Remark
		$	$	$
Revenue	2020 pizzas*$19 per pizza	38380	39050	670	Favorable
Less:-Expenses
Pizza ingredients	2020 pizzas*$4.50 per pizza	9090	9370	-280	Unfavorable
Kitchen staff		6150	6090	60	Favorable
Utilities	$730+(2020 pizzas*$0.50 per pizza)	1740	945	795	Favorable
Delivery person	160 deliveries*$3.30 per delivery	528	528	0	None
Delivery vehicle	$750+(160 deliveries*$1.50 per delivery)	990	1010	-20	Favorable
Equipment		496	496	0	None
Rent		2110	2110	0	None
Miscellaneous	$850+(2020 pizzas*$0.25 per pizza)	1355	862	493	Favorable
Total Expenses		22459	21411	1048	Favorable
Income from operations		15921	17639	1718	Favorable