Question

E24-18 The dental services. 7 separate invest is in charge o Services. Each mon The Dinkle and Frizell Dental Clinic provides both preventive and orthodontic services. The two owners, Reese Dinkle and Anita Frizell operate the clinic as two Prepare for an ir te investment centers: Preventive Services and Orthodontic Services. Each of them (LO 4) charge of one of the centers: Reese for Preventive Services and Anita for Orthodontic ices. Each month, they prepare an income statement for the two centers to evaluate ormance 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 erations. For several months, it has been reporting a loss. The responsibility report for 1 the month of May 2017 is shown on page 1090. performance

Answer 1

Responsibility report
			Difference
	Budget	Actual	F/U
Service revenue	39,000	40,000	1,000	F
variable costs:
Filling materials	4,900	5,000	100	U
Novacin	3,800	3,900	100	U
Supplies	2,250	1,900	350	F
Dental assistant wages	2,500	2,500	0	N
Utilities	390	500	110	U
total variable costs	13,840	13,800	40	F
contribution margin	25,160	26,200	1,040	F
Controllable fixed costs
Dentist salary	9,400	9,800	400	U
Equipment Depreciation	6,000	6,000	0	N
Total controllable fixed cost	15,400	15,800	400	U
Controllable margin (A)	9,760	10,400	640	F
Average investment (B) =(82400+77600)/2	80000.00
Return on investment (A/B)	12.20%	13.00%	0.80%	F