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 $ 5.00 Kitchen staff $ 6,250 Utilities $ 780 $ 1.00 Delivery person $ 2.80 Delivery vehicle $ 800 $ 2.00 Equipment depreciation $ 536 Rent $ 2,210 Miscellaneous $ 900 $ 0.10 In November, the pizzeria budgeted for 2,070 pizzas at an average selling price of $16 per pizza and for 230 deliveries. Data concerning the pizzeria’s actual results in November appear below: Actual Results Pizzas 2,170 Deliveries 210 Revenue $ 35,440 Pizza ingredients $ 10,270 Kitchen staff $ 6,190 Utilities $ 970 Delivery person $ 588 Delivery vehicle $ 1,020 Equipment depreciation $ 536 Rent $ 2,210 Miscellaneous $ 892

Answer 1