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ACCT 386 - Week 6 - Homework - Question 2

ACCT 386 - Week 6 - Homework - Question 2
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ACCT 386 - Week 6 - Homework - Question 2

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Question 2

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’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

$

6,200  

 

 

  Utilities

$

540  

$.10  

 

  Delivery person

 

 

 

$2.90   

  Delivery vehicle

$

690  

 

$1.70   

  Equipment depreciation

$

387  

 

 

  Rent

$

1,760  

 

 

  Miscellaneous

$

710  

$.01  

 


       In October, the pizzeria budgeted for 1,200 pizzas at an average selling price of $12.00 per pizza and for 210 deliveries.

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

 

Actual
Results

  Pizzas

 

1,300  

  Deliveries

 

190  

  Revenue

$

16,240  

  Pizza ingredients

$

5,830  

  Kitchen staff

$

6,140  

  Utilities

$

795  

  Delivery person

$

551  

  Delivery vehicle

$

1,159  

  Equipment depreciation

$

387  

  Rent

$

1,760  

  Miscellaneous

$

715