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Exercise 23-18 a Your answer is partially correct. Try again. 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 2020 is shown below. Difference from Budget Actual $40,000 $1,000 Favorable Service revenue Variable costs: Filling materials Novocain Supplies Dental assistant wages Utilities Total variable costs Fixed costs: Allocated portion of receptionist's salary Dentist salary Equipment depreciation Allocated portion of building depreciation Total fixed costs 5,000 3,900 1,900 2,500 500 13,800 100 Unfavorable 100 Unfavorable 350 Favorable -0- Neither Favorable nor Unfavorable 110 Unfavorable 40 Favorable 3,000 9,800 6,000 15,000 33,800 200 Unfavorable 400 Unfavorable -0- Neither Favorable nor Unfavorable 1,000 Unfavorable 1,600 Unfavorable Operating income (loss) $(7,600) $560 Unfavorable 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. Prepare an investment center responsibility report for the Preventative Services segment for May 2020. (Round ROI to 1 decimal place, e.g. 1.5%.) DINKLE AND FRIZELL DENTAL CLINIC Preventive Services Responsibility Report For the Month Ended May 31, 2020 Difference Favorable F Unfavorable U Neither Favorable nor Unfavorable N Budget Actual - T Service Revenue 39000 40000 1000] Favorable Variable Costs Filling Materials 4900 100 TUnfavorable A T T T Novocain T 3800 5000 3900 1900 100 Unfavorable T Supplies - 2250| 350 Favorable T Dental Assistant Wages T 2500 T 2500 o Neither Favorable nor Unfavorable Utilities T 390 T 500 S 110] Unfavorable Total Variable Costs 13840 13800 40 T Favorable Contribution Margin- 25160 26200 1040 Favorable T Controllable Fixed Costs A Dentist Salary 9800 400 Unfavorable 9400 6000 IBUJO T Equipment Depreciation 6000 Neither Favorable nor Unfavorable 4 T Total Controllable Fixed Costs 15400 15800 400 T Unfavorable Controllable Margin 9760 10400 640 640 Favorable Return on investment

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