Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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

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 2014 is shown on page 478.

The Dinkle and Frizell Dental Clinic provides both

In addition, the owners know that the investment in operating assets at the beginning of the month was $82,400, and it was $77,600 at the end of the month. They have asked for your assistance in evaluating their current performance reporting system.

Instructions
(a) Prepare a responsibility report for an investment center as illustrated in the chapter.
(b) Write a memo to the owners discussing the deficiencies of their current reporting system.
 

Difference from Actual Budget Service revenue $ 40,000 $1,000 F Variable costs 5,000 3,900 1,900 Filling materials 100 U NvOcain 100 U Supplies Dental assistant wages Utilities 350 F 2,500 -0- 500 110 U Total variable costs 13,800 40 F Fixed costs Allocated portion of receptionist's salary Dentist salary Equipment depreciation Allocated portion of building depreciation 3,000 200 U 9,800 400 U 6,000 -0- 15,000 33,800 $ (7,600) 1,000 U 1,600 U Total fixed costs Operating income (loss) $ 560 U

Step by Step Solution

3.38 Rating (160 Votes )

There are 3 Steps involved in it

Step: 1

Solution A B C E 1 particulars Budget Actual Diff FUN 2 Ser... blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Fundamentals of Cost Accounting

Authors: William Lanen, Shannon Anderson, Michael Maher

3rd Edition

9780078025525, 9780077517359, 77517350, 978-0077398194

More Books

Students also viewed these Accounting questions