nd Prize ental Clinic provides both preventive and orthodontic dental services. The two owners, Reese Dinkle and Anita Frizell, operate the clinic as two separate investment centers: Preventive Services and Orthodontic Services. Each of them is in charge of one of the centers: Reese for Preventive Services and Anita for Orthodontic Services. Each month, they prepare an income statement for the two centers to evaluate performance and make decisions about how to improve the operational efficiency and profitability of the clinic. Recently, they have been concerned about the profitability of the Preventive Services operations. For several months, it has been reporting a loss. The responsibility report for the month of May 2020 is shown below. Service revenue Variable costs Filling materials Novocain Supplies Dental assistant wages Utilities Total variable costs Fixed costs Allocated portion of receptionist's salary Dentist salary Equipment depreciation Allocated portion of building depreciation Total foxed costs Operating income (loss) Actual tment cen $40,000 5,000 3,900 1.900 2.500 500 13.800 3,000 9,800 6.000 15.000 33.800 $(7.600) Difference from Budget $1.000 Favorable 100 Unfavorable 100 Unfavorable 350 Favorable -0- Neither Favorable nor Unfavorable 110 Unfavorable 40 Favorable 200 Unfavorable 400 Unfavorable -0-Neither Favorable nor Unfavorable 1.000 Unfavorable 1.600 Unfavorable $560 Unfavorable In addition, the owners know that the investment in operating assets at the beginning of the month was $82.400, and it was $77.600 at the end of the month. They have asked for your assistance in evaluating their current performance reporting system responsibility report for the Preventative Services segment for May 2020. (Round ROI to 1 decimal place, eg 1.5%)
nd Prize ental Clinic provides both preventive and orthodontic dental services. The two owners, Reese Dinkle and Anita Frizell, operate the clinic as two separate investment centers: Preventive Services and Orthodontic Services. Each of them is in charge of one of the centers: Reese for Preventive Services and Anita for Orthodontic Services. Each month, they prepare an income statement for the two centers to evaluate performance and make decisions about how to improve the operational efficiency and profitability of the clinic. Recently, they have been concerned about the profitability of the Preventive Services operations. For several months, it has been reporting a loss. The responsibility report for the month of May 2020 is shown below. Service revenue Variable costs Filling materials Novocain Supplies Dental assistant wages Utilities Total variable costs Fixed costs Allocated portion of receptionist's salary Dentist salary Equipment depreciation Allocated portion of building depreciation Total foxed costs Operating income (loss) Actual tment cen $40,000 5,000 3,900 1.900 2.500 500 13.800 3,000 9,800 6.000 15.000 33.800 $(7.600) Difference from Budget $1.000 Favorable 100 Unfavorable 100 Unfavorable 350 Favorable -0- Neither Favorable nor Unfavorable 110 Unfavorable 40 Favorable 200 Unfavorable 400 Unfavorable -0-Neither Favorable nor Unfavorable 1.000 Unfavorable 1.600 Unfavorable $560 Unfavorable In addition, the owners know that the investment in operating assets at the beginning of the month was $82.400, and it was $77.600 at the end of the month. They have asked for your assistance in evaluating their current performance reporting system responsibility report for the Preventative Services segment for May 2020. (Round ROI to 1 decimal place, eg 1.5%)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Transcribed Image Text:Service Revenue
Variable Casts
Filling Materials
Novocain
Supplies
Dental Assistant Wates
Utilities
Total Variable Conts
Contribution Margin
Controllable Fixed Costs
Dentist Salary
Equipment Depreciation
Total Controllable Fixed Costs
Controllable Margin
Return on investment
<<
y
V
Budget
DINKLE AND FRIZELL DENTAL CLINIC
Preventive Services
Responsibility Report
For the Month Ended May 31, 2020
Actual
%
Difference
Favorable F
Unfavorable U
Nelther Favorable
nor Unfavorable N
%
Favorable
Unfavorable
Unfavorable
Favorable
Neither Favorable nor Unfavorable
Unfavorable
Favorable
Favorable
Unfavorable
Neither Favorable ner Untavorable
Unfavorable
Neither Favorable nor Unfavorable
Favorable
>
V
>
>
<
<
Transcribed Image Text:The Dinkle and Frizell Dental Clinic provides both preventive and orthodontic dental services. The two owners, Reese Dinkle and Anita Frizell, operate the clinic as two separate investment centers: Preventive Services and Orthodontic Services. Each of them is in
charge of one of the centers: Reese for Preventive Services and Anita for Orthodontic Services. Each month, they prepare an income statement for the two centers to evaluate performance and make decisions about how to improve the operational efficiency and
profitability of the clinic.
Recently, they have been concerned about the profitability of the Preventive Services operations. For several months, it has been reporting a loss. The responsibility report for the month of May 2020 is shown below.
Service revenue
Variable costs:
Filling materials
Novocain
Supplies
Dental assistant wages
Utilities
Total variable costs
Fixed costs:
Allocated portion of receptionist's salary
Dentist salary
Equipment depreciation
Allocated portion of building depreciation
Total fixed costs
Operating income (loss)
Actual
$40,000
5,000
3,900
1,900
2,500
500
13,800
3,000
9,800
6,000
15.000
33,800
$(7.600)
Difference
from Budget
$1,000 Favorable
100 Unfavorable
100 Unfavorable
350 Favorable
-0- Neither Favorable nor Unfavorable
110 Unfavorable
40 Favorable
200 Unfavorable
400 Unfavorable
-0- Neither Favorable nor Unfavorable
1.000 Unfavorable
1,600 Unfavorable
$560 Unfavorable
In addition, the owners know that the investment in operating assets at the beginning of the month was $82,400, and it was $77,600 at the end of the month. They have asked for your assistance in evaluating their current performance reporting system.
Prepare an investment center responsibility report for the Preventative Services segment for May 2020. (Round ROI to 1 decimal place, eg. 1.5%)
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