Question:
Verona Pizza is a small neighborhood pizzeria that has a little area for in-store dining as well offering takeout and free home delivery services. The pizzeria's owner has evaluated 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 $4.20
Kitchen staff $ 6,400
Utilities $ 540 $.10
Delivery person $2.30
Delivery vehicle $680 $1.50
Equipment depreciation $387
Rent $1,730
Miscellaneous $720 $.01
In October, the pizzeria budgeted for 1,700 pizzas at an average selling price of $13.00 per pizza and for 220 deliveries.
Data concerning the pizzeria's operations in October shown below:
Actual
Results
Pizzas 1,800
Deliveries 200
Revenue $23,940
Pizza ingredients $7,690
Kitchen staff $6,340
Utilities $845
Delivery person $460
Delivery vehicle $1,122
Equipment depreciation $387
Rent $1,730
Miscellaneous $ 730
Required:
1.
Do the flexible budget performance report that shows both activity variances and revenue and spending variances for the pizzeria for October. (Input all amounts as positive values. Leave no cells blank - be certain to enter "0" wherever needed. Point out the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Omit the "$" sign in your response.)
Verona Pizza
Flexible Budget Performance Report
For the Month Ended October 31
Activity Variances Revenue and Spending Variances
Revenue $ $
Expenses:
Pizza ingredients
Kitchen staff
Utilities
Delivery person
Delivery vehicle
Equipment depreciation
Rent
Miscellaneous
Total expense
Net operating income $