I need help aswering this and filling in all the boxes. The Dinkle and Frizell D
ID: 2461494 • Letter: I
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I need help aswering this and filling in all the boxes.
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. Shown below is the responsibility report for the month of May 2014.
Prepare a responsibility report for an investment center as illustrated in the chapter.
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. Shown below is the responsibility report for the month of May 2014. Difference from Budget Actual Service revenue Variable costs $40,770 $1,010 F Filling materials Novocain Supplies Dental assistant wages Utilities 5,170 4,010 1,900 2,450 530 14,060 140 U 52 U 420 F 0-N 100 U 128 F Total variable costs Fixed costs: Allocated portion of receptionist's salary 2,910 10,480 5,990 15,010 34,390 210 U 600 U 0-N 1,250 U 2,060 U $922 U Dentist salary Equipment depreciation Allocated portion of building depreciation Total fixed costs Operating income (loss) $(7,680) In addition, the owners know that the investment in operating assets at the beginning of the month was $80,170, and it was $72,370 at the end of the month. They have asked for your assistance in evaluating their current performance reporting system. Prepare a responsibility report for an investment center as illustrated in the chapter. (Round ROI to 1 decimal place, e.g. 1.6.)Explanation / Answer
Particulars Budget Actual Difference from budget Favorable(F)/Unfavorable(UF) Service revenue 39760 40770 1010 F Variable Costs: Filling materials 5030 5170 140 U Novocain 3958 4010 52 U Supplies 2320 1900 420 F Dental assistant wages 2450 2450 0 N Utilities 430 530 100 U Total Variable costs 14188 14060 128 F Fixed Costs: Allocated portion of receptionists salary 2700 2910 210 U Dentists salary 9880 10480 600 U Equipment Depreciation 5990 5990 0 N Allocated portion of building deprecition 13760 15010 1250 U Total Fixed costs 32330 34390 2060 U Operating Income(loss) -6758 -7680 922 U
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