Verona Pizza is a small neighborhood pizzeria that has a small area for in store dining as well offering takeout and free home delivery services. The pizzeria%u2019s owner has determined that the shop has two major cost drivers%u2014the number of pizzas sold and the number of deliveries made. Data concerning the pizzeria%u2019s costs appear below:
| Fixed Cost per Month |
Cost per Pizza |
Cost per Delivery |
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| Pizza ingredients | $ 4.10 | |||
| Kitchen staff | $ | 6,000 | ||
| Utilities | $ | 580 | $ .10 | |
| Delivery person | $ 2.70 | |||
| Delivery vehicle | $ | 690 | $ 1.50 | |
| Equipment depreciation | $ | 382 | ||
| Rent | $ | 1,770 | ||
| Miscellaneous | $ | 710 | $ .01 | |
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| In October, the pizzeria budgeted for 1,400 pizzas at an average selling price of $12.00 per pizza and for 240 deliveries. |
| Data concerning the pizzeria%u2019s operations in October appear below: |
| Actual Results |
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| Pizzas | 1,500 | |
| Deliveries | 220 | |
| Revenue | $ | 18,640 |
| Pizza ingredients | $ | 6,290 |
| Kitchen staff | $ | 5,940 |
| Utilities | $ | 855 |
| Delivery person | $ | 594 |
| Delivery vehicle | $ | 1,162 |
| Equipment depreciation | $ | 382 |
| Rent | $ | 1,770 |
| Miscellaneous | $ | 717 |
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| Required: | |
| 1. |
Compute the 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 required. Indicate the effect of each variance by selecting “F” for favorable, “U” for unfavorable, and “None” for no effect (i.e., zero variance).) |
| Verona Pizza Revenue and Spending Variances For the Month Ended October 31 |
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| Flexible Budget |
Actual Results |
Revenue and Spending Variances |
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| Revenue | $ | $ | $ | (Click to select) None F U |
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| Expenses: | ||||
| Pizza ingredients | (Click to select) F U None | |||
| Kitchen staff | (Click to select) F U None | |||
| Utilities | (Click to select) F U None | |||
| Delivery person | (Click to select) F U None | |||
| Delivery vehicle | (Click to select) F U None | |||
| Equipment depreciation | (Click to select) F U None | |||
| Rent | (Click to select) F U None | |||
| Miscellaneous | (Click to select) F U None | |||
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| Total expense | (Click to select) F U None | |||
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| Net operating income | $ | $ | $ | (Click to select) F U None |