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Prepare an investment center responsibility report for the Preventative Services segment for May 2020. Round ROI to 1 decimal place, eg. 1.5%)

Prepare an investment center responsibility report for the Preventative Services segment for May 2020. Round ROI to 1 decimal place, eg. 1.5%)

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Actual Budget $ $ A JUUU V > > > > > > > >
Transcribed Image Text:Actual Budget $ $ A JUUU V > > > > > > > >
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 foxed costs Operating income (los) Actual $41.030 5,050 3,940 1.910 2,460 470 13,830 3,040 10.300 5,920 15.060 34.320 $(7,120) Difference from Budget $1.250 Favorable 130 Unfavorable 120 Unfavorable 420 Favorable -0- Neither Favorable nor Unfavorable 100 Unfavorable 70 Favorable 290 Unfavorable 460 Unfavorable -0- Neither Favorable nor Unfavorable 1080 Unfavorable 1830 Unfavorable $510 Unfavorable In addition, the owners know that the investment in operating assets at the beginning of the month was $84,580, and it was $73.630 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. 1.5J
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 foxed costs Operating income (los) Actual $41.030 5,050 3,940 1.910 2,460 470 13,830 3,040 10.300 5,920 15.060 34.320 $(7,120) Difference from Budget $1.250 Favorable 130 Unfavorable 120 Unfavorable 420 Favorable -0- Neither Favorable nor Unfavorable 100 Unfavorable 70 Favorable 290 Unfavorable 460 Unfavorable -0- Neither Favorable nor Unfavorable 1080 Unfavorable 1830 Unfavorable $510 Unfavorable In addition, the owners know that the investment in operating assets at the beginning of the month was $84,580, and it was $73.630 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. 1.5J
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