Kirkland Plumbing Company is a newly formed company specializing in plumbing ser

Question

Kirkland Plumbing Company is a newly formed company specializing in plumbing services for home and business. The owner, Lenny Kirkland, had divided the company into two segments: Home Plumbing Services and Business Plumbing Services. Each segment is run by its own supervisor, while basic selling and administrative services are shared by both segments. Lenny has asked you to help him create a performance reporting system that will allow him to measure each segment's performance in terms of its profitability. To that end, the following information has been collected on the Home Plumbing Services segment for the first quarter of 2014. Prepare a responsibility report for the first quarter of 2014 for the Home Plumbing Services segment. (List variable costs before fixed costs.)

Explanation / Answer

Budgeted Actual Variances Service Revenue      26,000 26,900         (900) F Allocated portion of: Variable Cost Advertsing        5,300     4,400          900 F Billing        3,800     3,200          600 F Materaila and Supplies        1,300     1,100          200 F Gas And Oil        2,600     3,300         (700) U Wages        2,800     3,400         (600) U Fixed Cost Building depreciation      10,400 10,400             -   N Proeprty Taxed        1,100     1,100             -   N Supervisor Salaries        9,100     9,300         (200) U Insurances        4,500     4,000          500 F Equipment Deprecaition        1,500     1,100          400 F

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