More than One Cost Driver
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
$
1.8
Kitchen staff
$
4,620
Utilities
$
490
$
1
Delivery person
$
3.3
Delivery vehicle
$
350
$
1
Equipment depreciation
$
232
Rent
$
1,660
Miscellaneous
$
790
$
1
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In November, the pizzeria budgeted for 2,200 pizzas at an average selling price of $16 per pizza and for 190 deliveries.
Data concerning the pizzeria's operations in November appear below:
Actual Results
Pizzas
2,220
Deliveries
180
Revenue
$
17,200
Pizza ingredients
$
3,285
Kitchen staff
$
5,330
Utilities
$
900
Delivery person
$
430
Delivery vehicle
$
700
Equipment depreciation
$
110
Rent
$
1,820
Miscellaneous
$
920
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Required:
Prepare a flexible budget performance report that shows both activity variances and revenue and spending variances for the pizzeria for November. (Leave no cells blank - be certain to enter "0" wherever required. 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. Omit the "$" sign in your response.)
I just need help how to find the revenue activity variance and spending variences for pizza. Please tell me how I can find that.
Linear Mode
