Question

Problem 8-19A More Than One Cost Driver [LO8-2, LO8-3] 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		$4.40
Kitchen Staff	$5,910
Utilities	$610	$.30
Delivery Person			$3.10
Delivery Vehicle	$630		$1.50
Equipment depreciation	$400
Rent	$1870
Miscellaneous	$730	$.15

In November, the pizzeria budgeted for 1,560 pizzas at an average selling price of $15 per pizza and for 220 deliveries.

Data concerning the pizzeria’s operations in November appear below:

	Actual Results
Pizzas	1,660
Deliveries	200
Revenue	$25,450
Pizza Ingredients	$7,210
Kitchen Staff	$5,850
Utilities	$885
Delivery person	$620
Delivery Vehicle	$986
Equipment depreciation	$400
Rent	$1870
Miscellaneous	$790

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

Milano Pizza
Revanue and Spending Variances
For the Month Ended November 30
	Actual Results	Revenue And Spending Variances		Flexible Budget
Revenue	$25,450
Expenses:
Pizza ingredients	7,210
Kitchen staff	5,850
Utilities	885
Delivery person	620
Delivery vehicle	986
Equipment depreciation	400
Rent	1,870
Miscellaneous	790
Total Expense	18,611
Net Operating Income	$6,839

Answer 1