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Exercise 23-11 a

UrLink 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 segments 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 2020.

		Budgeted		Actual
Service revenue		$25,500		$25,500
Allocated portion of:
Building depreciation		10,400		10,400
Advertising		5,400		4,500
Billing		3,800		2,800
Property taxes		1,300		1,100
Material and supplies		1,300		1,000
Supervisory salaries		9,300		9,100
Insurance		4,300		3,400
Wages		3,100		3,000
Gas and oil		3,100		3,100
Equipment depreciation		1,500		1,300

Prepare a responsibility report for the first quarter of 2020 for the Home Internet Service Segment.

URLINK COMPANY Home Internet Services Segment Responsibility Report For the Quarter Ended March 31, 2020
						Difference
		Budgeted		Actual		Favorable Unfavorable Neither Favorable nor Unfavorable
Controllable MarginContribution MarginControllable Fixed CostsEquipment DepreciationGas and OilInsuranceMaterial and SuppliesService RevenueSupervisory SalariesTotal Controllable Fixed CostsTotal Variable CostsVariable CostsWagesBuilding DepreciationAdvertisingBillingProperty Taxes		$		$		$	Neither Favorable nor UnfavorableFavorableUnfavorable
Contribution MarginEquipment DepreciationGas and OilInsuranceMaterial and SuppliesService RevenueSupervisory SalariesTotal Variable CostsVariable CostsWagesBuilding DepreciationAdvertisingBillingProperty Taxes
Contribution Margin Controllable Fixed Costs Equipment Depreciation Gas and Oil Insurance Material and Supplies Service Revenue Supervisory Salaries Total Controllable Fixed Costs Total Variable Costs Variable Costs Wages Building Depreciation Advertising Billing Property Taxes							UnfavorableNeither Favorable nor UnfavorableFavorable
Contribution Margin Controllable Fixed Costs Equipment Depreciation Gas and Oil Insurance Material and Supplies Service Revenue Supervisory Salaries Total Controllable Fixed Costs Total Variable Costs Variable Costs Wages Building Depreciation Advertising Billing Property Taxes							FavorableNeither Favorable nor UnfavorableUnfavorable
Contribution Margin Controllable Fixed Costs Equipment Depreciation Gas and Oil Insurance Material and Supplies Service Revenue Supervisory Salaries Total Controllable Fixed Costs Total Variable Costs Variable Costs Wages Building Depreciation Advertising Billing Property Taxes							Neither Favorable nor UnfavorableUnfavorableFavorable
Contribution MarginEquipment DepreciationGas and OilInsuranceMaterial and SuppliesService RevenueSupervisory SalariesTotal Variable CostsVariable CostsWagesBuilding DepreciationAdvertisingBillingProperty Taxes							UnfavorableFavorableNeither Favorable nor Unfavorable
Contribution MarginEquipment DepreciationGas and OilInsuranceMaterial and SuppliesService RevenueSupervisory SalariesTotal Variable CostsVariable CostsWagesBuilding DepreciationAdvertisingBillingProperty Taxes							FavorableUnfavorableNeither Favorable nor Unfavorable
Controllable MarginControllable Fixed CostsEquipment DepreciationGas and OilInsuranceMaterial and SuppliesService RevenueSupervisory SalariesTotal Controllable Fixed CostsWagesBuilding DepreciationAdvertisingBillingProperty Taxes
Controllable Margin Controllable Fixed Costs Equipment Depreciation Gas and Oil Insurance Material and Supplies Service Revenue Supervisory Salaries Total Controllable Fixed Costs Total Variable Costs Variable Costs Wages Building Depreciation Advertising Billing Property Taxes							Neither Favorable nor UnfavorableFavorableUnfavorable
Controllable Margin Controllable Fixed Costs Equipment Depreciation Gas and Oil Insurance Material and Supplies Service Revenue Supervisory Salaries Total Controllable Fixed Costs Total Variable Costs Variable Costs Wages Building Depreciation Advertising Billing Property Taxes							FavorableUnfavorableNeither Favorable nor Unfavorable
Controllable Margin Controllable Fixed Costs Equipment Depreciation Gas and Oil Insurance Material and Supplies Service Revenue Supervisory Salaries Total Controllable Fixed Costs Total Variable Costs Variable Costs Wages Building Depreciation Advertising Billing Property Taxes							UnfavorableNeither Favorable nor UnfavorableFavorable
Controllable MarginControllable Fixed CostsEquipment DepreciationGas and OilInsuranceMaterial and SuppliesService RevenueSupervisory SalariesTotal Controllable Fixed CostsWagesBuilding DepreciationAdvertisingBillingProperty Taxes							Neither Favorable nor UnfavorableFavorableUnfavorable
Controllable MarginControllable Fixed CostsEquipment DepreciationGas and OilInsuranceMaterial and SuppliesService RevenueSupervisory SalariesTotal Controllable Fixed CostsWagesBuilding DepreciationAdvertisingBillingProperty Taxes		$		$		$	FavorableUnfavorableNeither Favorable nor Unfavorable

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