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. Data concerning the pizzeria’s costs appear below: Fixed Cost per Month Cost per Pizza Cost per Delivery Pizza ingredients $ 4.90 Kitchen staff $ 6,010 Utilities $ 660 $ 0.80 Delivery person $ 2.60 Delivery vehicle $ 680 $ 2.00 Equipment depreciation $ 440 Rent $ 1,970 Miscellaneous $ 780 $ 0.10 In November, the pizzeria budgeted for 1,710 pizzas at an average selling price of $20 per pizza and for 190 deliveries. Data concerning the pizzeria’s operations in November appear below: Actual Results Pizzas 1,810 Deliveries 170 Revenue $ 36,800 Pizza ingredients $ 8,110 Kitchen staff $ 5,950 Utilities $ 910 Delivery person $ 442 Delivery vehicle $ 996 Equipment depreciation $ 440 Rent $ 1,970 Miscellaneous $ 820 Required: 1. Compute the revenue and spending variances for the pizzeria for November

Answer 1

	Fixed Cost per month	Cost per Pizza	Cosr per delivery
Pizza ingredients		$            4.90
Kitchen staff	$ 6,010.00
Utilities	$     660.00	$            0.80
Delivery Person			$            2.60
Delivery Vehicle	$     680.00		$            2.00
Equipment Dep	$     440.00
Rent	$ 1,970.00
Miscellaneous	$     780.00	$            0.10
Budger Unit = 1710 @ $20 pizza and for 190 deliveries
Pizza	1810
Deliveries	170
revenue	36800
Pizza Ingredient	8110
Kitchen Staff	5950
Utilities	910
Delivery Person	442
Delivery Vehicle	996
Equipment Dep	440
Rent	1970
Miscellaneous	820
		Budgeted	Standard Cost of Actuals	Variance		Actual results	revenue and spending variances
Pizza (Q1)		1710	1810			1810
Deliveries (Q2)		190	170			170
revenue	[1710*$20]	$ 34,200.00	36800	$ 2,600.00	F	36800
Expenses
Pizza Ingredient	[4.9*Q1]	$    8,379.00	8869	$     490.00	U	8110	759	F
Kitchen Staff		6010	6010	0		5950	60	F
Utilities	[660+0.80*Q1]	2028	2108	80	U	910	1198	F
Delivery Person	[2.6*Q2]	494	442	52	F	442	0
Delivery Vehicle	[Q2*2.0]	380	340	40	F	996	656	F
Equipment Dep		440	440	0		440	0
Rent		1970	1970	0		1970	0
Miscellaneous	[780+0.10*Q1]	951	961	10	U	820	141	F
Total Expense		$ 20,652.00	$ 21,140.00	488	U	$ 19,638.00	1502	F
Net Operating Income		$ 13,548.00	$ 15,660.00	2112	F	$ 17,162.00	$ 1,502.00	F