Question

The Dinkle and Frizell Dental Clinic provides both preventive and orthodontic dental services. The two owners,...

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.

Actual

Difference
from Budget

Service revenue $41,670 $1,160 Favorable
Variable costs:
    Filling materials 4,930 150 Unfavorable
    Novocain 3,930 70 Unfavorable
    Supplies 1,980 420 Favorable
    Dental assistant wages 2,420 –0– Neither Favorable nor Unfavorable
    Utilities 550 130 Unfavorable
Total variable costs 13,810 70 Favorable
Fixed costs:
    Allocated portion of receptionist’s salary 3,170 320 Unfavorable
    Dentist salary 9,500 550 Unfavorable
    Equipment depreciation 5,920 –0– Neither Favorable nor Unfavorable
    Allocated portion of building depreciation 15,070 1,080 Unfavorable
Total fixed costs 33,660 1,950 Unfavorable
Operating income (loss) $(5,800 ) $720 Unfavorable


In addition, the owners know that the investment in operating assets at the beginning of the month was $82,620, and it was $73,520 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.

Homework Answers

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Durham Company uses a responsibility reporting system. It has divisions in Denver, Seattle, and San Diego....
Durham Company uses a responsibility reporting system. It has divisions in Denver, Seattle, and San Diego. Each division has three production departments: Cutting, Shaping, and Finishing. The responsibility for each department rests with a manager who reports to the division production manager. Each division manager reports to the vice president of production. There are also vice presidents for marketing and finance. All vice presidents report to the president. In January 2020, controllable actual and budget manufacturing overhead cost data for...
Please read the article and answear about questions. Determining the Value of the Business After you...
Please read the article and answear about questions. Determining the Value of the Business After you have completed a thorough and exacting investigation, you need to analyze all the infor- mation you have gathered. This is the time to consult with your business, financial, and legal advis- ers to arrive at an estimate of the value of the business. Outside advisers are impartial and are more likely to see the bad things about the business than are you. You should...
Sign In INNOVATION Deep Change: How Operational Innovation Can Transform Your Company by Michael Hammer From...
Sign In INNOVATION Deep Change: How Operational Innovation Can Transform Your Company by Michael Hammer From the April 2004 Issue Save Share 8.95 In 1991, Progressive Insurance, an automobile insurer based in Mayfield Village, Ohio, had approximately $1.3 billion in sales. By 2002, that figure had grown to $9.5 billion. What fashionable strategies did Progressive employ to achieve sevenfold growth in just over a decade? Was it positioned in a high-growth industry? Hardly. Auto insurance is a mature, 100-year-old industry...
Delta airlines case study Global strategy. Describe the current global strategy and provide evidence about how...
Delta airlines case study Global strategy. Describe the current global strategy and provide evidence about how the firms resources incompetencies support the given pressures regarding costs and local responsiveness. Describe entry modes have they usually used, and whether they are appropriate for the given strategy. Any key issues in their global strategy? casestudy: Atlanta, June 17, 2014. Sea of Delta employees and their families swarmed between food trucks, amusement park booths, and entertainment venues that were scattered throughout what would...
Please answer the following Case analysis questions 1-How is New Balance performing compared to its primary...
Please answer the following Case analysis questions 1-How is New Balance performing compared to its primary rivals? How will the acquisition of Reebok by Adidas impact the structure of the athletic shoe industry? Is this likely to be favorable or unfavorable for New Balance? 2- What issues does New Balance management need to address? 3-What recommendations would you make to New Balance Management? What does New Balance need to do to continue to be successful? Should management continue to invest...