Question

Please explain everything you do

Exercise 14-11 Riverbed Company is a newly formed company specializing in high-speed Internet service for home and business. The owner, Lenny Kirkland, had divided the company into two segments: Home Internet Service and Business Internet Service. 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 Internet Service segment for the first quarter of 2017. Budgeted $24,900 Actual $26,300 11,500 5,400 Service revenue Allocated portion of: Building depreciation Advertising Billing Property taxes Material and supplies Supervisory salaries Insurance Wages Gas and oil Equipment depreciation 3,200 1,100 1,500 8,500 4,100 3,100 2,700 1,600 11,500 4,300 2,700 1,000 1,400 9,500 3,600 3,200 3,200 1,200 (a) Prepare a responsibility report for the first quarter of 2017 for the Home Internet Service segment.

Answer 1

responsibility report

we will take budgeted and actual data and find the dfferential amount between the two

budgeted cost > actual cost = Favrable

Budgeted cost<actual cost = unfavorable

budgeted revenue > actual revenue = unfavorable

budgeted revenue < actual revenue = favorable

	budgeted	actual		favorable/unfavorable
Service revenue	24900	26300	1400[24900-26300]	F
variable costs
material and supplies	1500	1400	100	F
wages	3100	3200	100	U
gas and oil	2700	3200	500	U
Total variable costs	7300	7800	500	U
contribution margin	17600[24900-7300]	18500[26300-7800]	900	F
controllable fixed cost
supervisors salaries	8500	9500	1000	U
insurance	4100	3600	500	F
equipment depreciation	1600	1200	400	F
Total controllable fixed costs	14200	14300	100	U
controllable margin	3400[17600-14200]	4200[18500-14300]	800[100-900]	F

ALLOCATED PORTIONS ARE NOT CONTROLLABLE SO THEY WILL NOT FORM PART OF RESPONSIBILITY REPORT.