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%)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Hh1.
Account
Transcribed Image Text:Actual
Budget
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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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