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			Cost per Delivery
Pizza ingredients				$	4.10
Kitchen staff	$	6,290
Utilities	$	800		$	0.20
Delivery person							$	3.00
Delivery vehicle	$	820					$	2.20
Equipment depreciation	$	552
Rent	$	2,250
Miscellaneous	$	920		$	0.10

In November, the pizzeria budgeted for 2,130 pizzas at an average selling price of $18 per pizza and for 250 deliveries.

Data concerning the pizzeria’s actual results in November appear below:

	Actual Results
Pizzas		2,230
Deliveries		230
Revenue	$	40,880
Pizza ingredients	$	10,630
Kitchen staff	$	6,230
Utilities	$	980
Delivery person	$	690
Delivery vehicle	$	1,024
Equipment depreciation	$	552
Rent	$	2,250
Miscellaneous	$	904

Required:

1. Complete the flexible budget performance report that shows both revenue and spending variances and activity variances for the pizzeria for November.

Answer 1