The Bramble 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. Actual Difference from Budget Service revenue $39,220 $1,300 Favorable Variable costs: Filling materials 4,950 130 Unfavorable Novocain 4,120 100 Unfavorable Supplies 1,900 450 Favorable Dental assistant wages 2,460 –0– Neither Favorable nor Unfavorable Utilities 470 90 Unfavorable Total variable costs 13,900 130 Favorable Fixed costs: Allocated portion of receptionist’s salary 3,020 180 Unfavorable Dentist salary 9,560 490 Unfavorable Equipment depreciation 5,950 –0– Neither Favorable nor Unfavorable Allocated portion of building depreciation 14,920 1,050 Unfavorable Total fixed costs 33,450 1,720 Unfavorable Operating income (loss) $(8,130 ) $290 Unfavorable In addition, the owners know that the investment in operating assets at the beginning of the month was $83,540, and it was $71,020 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, e.g. 1.5%.) BRAMBLE DENTAL CLINIC Preventive Services Responsibility Report For the Month Ended May 31, 2020 Difference Budget Actual Favorable F Unfavorable U Neither Favorable nor Unfavorable N $ $ $ $ $ $

The Bramble 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. Actual Difference from Budget Service revenue $39,220 $1,300 Favorable Variable costs: Filling materials 4,950 130 Unfavorable Novocain 4,120 100 Unfavorable Supplies 1,900 450 Favorable Dental assistant wages 2,460 –0– Neither Favorable nor Unfavorable Utilities 470 90 Unfavorable Total variable costs 13,900 130 Favorable Fixed costs: Allocated portion of receptionist’s salary 3,020 180 Unfavorable Dentist salary 9,560 490 Unfavorable Equipment depreciation 5,950 –0– Neither Favorable nor Unfavorable Allocated portion of building depreciation 14,920 1,050 Unfavorable Total fixed costs 33,450 1,720 Unfavorable Operating income (loss) $(8,130 ) $290 Unfavorable In addition, the owners know that the investment in operating assets at the beginning of the month was $83,540, and it was $71,020 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, e.g. 1.5%.) BRAMBLE DENTAL CLINIC Preventive Services Responsibility Report For the Month Ended May 31, 2020 Difference Budget Actual Favorable F Unfavorable U Neither Favorable nor Unfavorable N $ $ $ $ $ $

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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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.

	Actual		Difference from Budget
Service revenue	$39,220			$1,300	Favorable
Variable costs:
Filling materials	4,950			130	Unfavorable
Novocain	4,120			100	Unfavorable
Supplies	1,900			450	Favorable
Dental assistant wages	2,460			–0–	Neither Favorable nor Unfavorable
Utilities	470			90	Unfavorable
Total variable costs	13,900			130	Favorable
Fixed costs:
Allocated portion of receptionist’s salary	3,020			180	Unfavorable
Dentist salary	9,560			490	Unfavorable
Equipment depreciation	5,950			–0–	Neither Favorable nor Unfavorable
Allocated portion of building depreciation	14,920			1,050	Unfavorable
Total fixed costs	33,450			1,720	Unfavorable
Operating income (loss)	$(8,130	)		$290	Unfavorable

In addition, the owners know that the investment in operating assets at the beginning of the month was $83,540, and it was $71,020 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, e.g. 1.5%.)

BRAMBLE DENTAL CLINIC Preventive Services Responsibility Report For the Month Ended May 31, 2020
						Difference
	Budget		Actual		Favorable F Unfavorable U Neither Favorable nor Unfavorable N
	$			$		$












	$			$		$

Return on investment		%			%

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