Revenue and spending variance : The difference between the actual and budgeted revenue and expenses is stated as revenue and spending variance. It helps the organization to compare the actual results with the budget and analyze those differences. The company can achieve its desired profit with favorable price variance. It has a positive impact on profitability. An unfavorable variance suggests negative profits because, with the increased costs, the profits are reduced. To prepare: A flexible budget performance report.

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Answer 1

Question

Chapter 9, Problem 19P

1.

To determine

Concept Introduction:

Revenue and spending variance: The difference between the actual and budgeted revenue and expenses is stated as revenue and spending variance. It helps the organization to compare the actual results with the budget and analyze those differences. The company can achieve its desired profit with favorable price variance. It has a positive impact on profitability. An unfavorable variance suggests negative profits because, with the increased costs, the profits are reduced.

To prepare: A flexible budget performance report.

2.

To determine

Concept Introduction:

Activity Variance: A revenue or cost item in the flexible budget differs from the same item in the static planning budget by an activity variance. The difference between the actual level of activity used in the flexible budget and the level of activity assumed in the planning budget is the sole cause of an activity variance.

The activity variance.

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Milano Pizza is a small neighborhood pizzeria that has a small area for in-store dining as well as offeringtake-out and free home delivery services. The pizzeria’s owner has determined that the shop has two majorcost drivers—the number of pizzas sold and the number of deliveries made. Data concerning the pizzeria’scosts appear below:Fixed Cost Cost per Cost perper Month Pizza DeliveryPizza ingredients ............... $3.80Kitchen staff ....................... $5,220Utilities ............................... $630 $0.05Delivery person .................. $3.50Delivery vehicle ................. $540 $1.50Equipment depreciation ..... $275Rent ................................... $1,830Miscellaneous .................... $820 $0.15In November, the pizzeria budgeted for 1,200 pizzas at an average selling price of $13.50 per pizzaand for 180 deliveries.Data concerning the pizzeria’s operations in November appear below:Actual ResultsPizzas ................................... 1,240Deliveries…

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. The pizzeria's cost formulas appear below: Pizza ingredients Fixed Cost Cost per per Month Pizza $ 4.50 $ 5,930 Cost per Delivery Kitchen staff Utilities Delivery person Delivery vehicle Equipment depreciation Rent Miscellaneous $ 620 $640 $ 408 $1,890 $740 $0.40 $ 3.20 $ 0.20 $ 1.60 In November, the pizzeria budgeted for 1,590 pizzas at an average selling price of $16 per pizza and for 230 deliveries. Data concerning the pizzeria's actual results in November appear below. Actual Results Pizzas Deliveries Revenue 1,690 210 Kitchen staff Delivery person $27,600 Pizza ingredients $ 7,390 $ 5,870 Utilities. $ 890 $ 672 $ 988 $ 408 $ 1,890 $ 796 Delivery vehicle Equipment depreciation Rent Miscellaneous…

A company sells a pizza for an average price of $20. They estimate that the cost of the material and labor to make one is $4. What is the gross profit margin for one pizza? 0.2 5 0.8 None are correct

Answer 2

Question

Chapter 9, Problem 19P

1.

To determine

Concept Introduction:

Revenue and spending variance: The difference between the actual and budgeted revenue and expenses is stated as revenue and spending variance. It helps the organization to compare the actual results with the budget and analyze those differences. The company can achieve its desired profit with favorable price variance. It has a positive impact on profitability. An unfavorable variance suggests negative profits because, with the increased costs, the profits are reduced.

To prepare: A flexible budget performance report.

2.

To determine

Concept Introduction:

Activity Variance: A revenue or cost item in the flexible budget differs from the same item in the static planning budget by an activity variance. The difference between the actual level of activity used in the flexible budget and the level of activity assumed in the planning budget is the sole cause of an activity variance.

The activity variance.

Expert Solution & Answer

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Answer 3

Question

Chapter 9, Problem 19P

1.

To determine

Concept Introduction:

Revenue and spending variance: The difference between the actual and budgeted revenue and expenses is stated as revenue and spending variance. It helps the organization to compare the actual results with the budget and analyze those differences. The company can achieve its desired profit with favorable price variance. It has a positive impact on profitability. An unfavorable variance suggests negative profits because, with the increased costs, the profits are reduced.

To prepare: A flexible budget performance report.

2.

To determine

Concept Introduction:

Activity Variance: A revenue or cost item in the flexible budget differs from the same item in the static planning budget by an activity variance. The difference between the actual level of activity used in the flexible budget and the level of activity assumed in the planning budget is the sole cause of an activity variance.

The activity variance.

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Answer 4

Question

Chapter 9, Problem 19P

1.

To determine

Concept Introduction:

Revenue and spending variance: The difference between the actual and budgeted revenue and expenses is stated as revenue and spending variance. It helps the organization to compare the actual results with the budget and analyze those differences. The company can achieve its desired profit with favorable price variance. It has a positive impact on profitability. An unfavorable variance suggests negative profits because, with the increased costs, the profits are reduced.

To prepare: A flexible budget performance report.

2.

To determine

Concept Introduction:

Activity Variance: A revenue or cost item in the flexible budget differs from the same item in the static planning budget by an activity variance. The difference between the actual level of activity used in the flexible budget and the level of activity assumed in the planning budget is the sole cause of an activity variance.

The activity variance.

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Answer 5

Chapter 9, Problem 19P

1.

To determine

Concept Introduction:

Revenue and spending variance: The difference between the actual and budgeted revenue and expenses is stated as revenue and spending variance. It helps the organization to compare the actual results with the budget and analyze those differences. The company can achieve its desired profit with favorable price variance. It has a positive impact on profitability. An unfavorable variance suggests negative profits because, with the increased costs, the profits are reduced.

To prepare: A flexible budget performance report.

2.

To determine

Concept Introduction:

Activity Variance: A revenue or cost item in the flexible budget differs from the same item in the static planning budget by an activity variance. The difference between the actual level of activity used in the flexible budget and the level of activity assumed in the planning budget is the sole cause of an activity variance.

The activity variance.

Answer 6

Chapter 9, Problem 19P

1.

To determine

Concept Introduction:

Revenue and spending variance: The difference between the actual and budgeted revenue and expenses is stated as revenue and spending variance. It helps the organization to compare the actual results with the budget and analyze those differences. The company can achieve its desired profit with favorable price variance. It has a positive impact on profitability. An unfavorable variance suggests negative profits because, with the increased costs, the profits are reduced.

To prepare: A flexible budget performance report.

Answer 7

Chapter 9, Problem 19P

1.

To determine

Concept Introduction:

Revenue and spending variance: The difference between the actual and budgeted revenue and expenses is stated as revenue and spending variance. It helps the organization to compare the actual results with the budget and analyze those differences. The company can achieve its desired profit with favorable price variance. It has a positive impact on profitability. An unfavorable variance suggests negative profits because, with the increased costs, the profits are reduced.

To prepare: A flexible budget performance report.

Answer 8

2.

To determine

Concept Introduction:

Activity Variance: A revenue or cost item in the flexible budget differs from the same item in the static planning budget by an activity variance. The difference between the actual level of activity used in the flexible budget and the level of activity assumed in the planning budget is the sole cause of an activity variance.

The activity variance.

Answer 9

2.

To determine

Concept Introduction:

Activity Variance: A revenue or cost item in the flexible budget differs from the same item in the static planning budget by an activity variance. The difference between the actual level of activity used in the flexible budget and the level of activity assumed in the planning budget is the sole cause of an activity variance.

The activity variance.

Answer 10

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Answer 11

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Answer 12

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Answer 13

Ch. 9 - Prob. 1Q Ch. 9 - What is a flexible budget and how does it differ...Ch. 9 - Prob. 3Q Ch. 9 - Why is it difficult to interpret a difference...Ch. 9 - What is an activity variance and what does it...Ch. 9 - Prob. 6Q Ch. 9 - Prob. 7Q Ch. 9 - Prob. 8Q Ch. 9 - Prob. 9Q Ch. 9 - Prob. 10Q

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Chapter 9 Solutions