Question
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 2017 is shown below.
In addition, the owners know that the investment in operating assets at the beginning of the month was $80,290, and it was $73,430 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. 1.5.)
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Exercise 10-18 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 2017 is shown below Difference from Budget Actual Service revenue $40,450 $1,260 Favorable Variable costs: Filling materials Novocain Supplies Dental assistant wages Utilities 120 Unfavorable 5,080 3,950 1,890 2,550 520 13,990 80 Unfavorable 420 Favorable -0- Neither Favorable nor Unfavorabl 100 Unfavorable 120 Favorable Total variable costs Fixed costs: Allocated portion of receptionist's salary 300 Unfavorable 490 Unfavorable 3,010 9,820 5,970 15,150 33,950 $(7,490 Dentist salary Equipment depreciation -0- Neither Favorable nor Unfavorabl Allocated portion of building depreciation Total fixed costs Operating income (loss) 1,130 Unfavorable 1,920 Unfavorable $540 Unfavorable In addition, the owners know that the investment in operating assets at the beginning of the month was $80,290, and it was $73,430 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. 1.5.)Step by Step Solution
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