Milano Pizza is a small neighborhood pizzeria that has a smallarea for in-store dining as well as offering take-out and free homedelivery services. The pizzeria’s owner has determined that theshop has two major cost drivers—the number of pizzas sold and thenumber of deliveries made.
The pizzeria’s cost formulas appear below:
| Fixed Cost
per Month | Cost per
Pizza | Cost per
Delivery |
| Pizza ingredients | | | | $ | 4.80 | | | | |
| Kitchen staff | $ | 6,210 | | | | | | | |
| Utilities | $ | 760 | | $ | 0.80 | | | | |
| Delivery person | | | | | | | $ | 2.60 | |
| Delivery vehicle | $ | 780 | | | | | $ | 1.80 | |
| Equipment depreciation | $ | 520 | | | | | | | |
| Rent | $ | 2,170 | | | | | | | |
| Miscellaneous | $ | 880 | | $ | 0.20 | | | | |
| |
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In November, the pizzeria budgeted for 2,010 pizzas at anaverage selling price of $14 per pizza and for 210 deliveries.
Data concerning the pizzeria’s actual results in November appearbelow:
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| Actual Results |
| Pizzas | | 2,110 | |
| Deliveries | | 190 | |
| Revenue | $ | 30,240 | |
| Pizza ingredients | $ | 9,910 | |
| Kitchen staff | $ | 6,150 | |
| Utilities | $ | 960 | |
| Delivery person | $ | 494 | |
| Delivery vehicle | $ | 1,016 | |
| Equipment depreciation | $ | 520 | |
| Rent | $ | 2,170 | |
| Miscellaneous | $ | 880 | |
|
Required:
1. Compute the revenue and spending variances for the pizzeriafor November. (Indicate the effect of each variance byselecting "F" for favorable, "U" for unfavorable, and "None" for noeffect (i.e., zero variance). Input all amounts as positivevalues.)
