Correct answer! Exercise 10-11 UrLink Company is a newly formed two segments: Ho
ID: 2429895 • Letter: C
Question
Correct answer!Exercise 10-11 UrLink Company is a newly formed two segments: Home Internet Service and Business Internet Service. Each by both segments. company specializing in high-speed Internet service for home and business. The owner, Lenny Kirkland, had divided the company into Lenny has asked you to help him create a performance end, the following information has been collected on the Home Internet Service segment for the first quarter of 2017 reporting system that will allow him to measure each segment's performance in terms of its profitability. To that Budgeted Actual Service revenue 26,000 $25,500 Allocated portion of: Building depreciation 2,000 12,000 5,5004,300 3,300 2,900 1,300 1,100 1,6001,400 8,500 9,400 4,200 3,000 2,900 3,100 2,300 3,000 1,500 1,500 Advertising Billing Property taxes Material and supplies Supervisory salaries Insurance Wages Gas and oil Equipment depreciation Prepare a responsibility report for the first quarter of 2017 for the Home Internet Service Segment. URLINK COMPANY Home Internet Services Segment
Explanation / Answer
Answer
>Actual revenues, Contribution margin, or Net Income is MORE than Budgeted values for the same.
>Actual Costs are LESS than Budgeted Costs.
Budget
Actual
Difference
F /U/ Neither F nor U
Sales Revenue
$ 26,000.00
$ 25,500.00
$ 500.00
Unfavourable
Variable Costs:
Material & Supplies
$ 1,600.00
$ 1,400.00
$ 200.00
Favourable
Wages
$ 2,900.00
$ 3,100.00
$ 200.00
Unfavourable
Gas and oil
$ 2,300.00
$ 3,000.00
$ 700.00
Unfavourable
Total Variable costs
$ 6,800.00
$ 7,500.00
$ 700.00
Unfavourable
Contribution margin
$ 19,200.00
$ 18,000.00
$ 1,200.00
Favourable
Fixed Costs:
Supervisory Salaries
$ 8,500.00
$ 9,400.00
$ 900.00
Unfavourable
Insurance
$ 4,200.00
$ 3,000.00
$ 1,200.00
Favourable
Equipment depreciation
$ 1,500.00
$ 1,500.00
$ -
Neither Favourable nor Unfavourable
Total Fixed Cost
$ 14,200.00
$ 13,900.00
$ 300.00
Favourable
Net Income
$ 5,000.00
$ 4,100.00
$ 900.00
Unfavourable
Budget
Actual
Difference
F /U/ Neither F nor U
Sales Revenue
$ 26,000.00
$ 25,500.00
$ 500.00
Unfavourable
Variable Costs:
Material & Supplies
$ 1,600.00
$ 1,400.00
$ 200.00
Favourable
Wages
$ 2,900.00
$ 3,100.00
$ 200.00
Unfavourable
Gas and oil
$ 2,300.00
$ 3,000.00
$ 700.00
Unfavourable
Total Variable costs
$ 6,800.00
$ 7,500.00
$ 700.00
Unfavourable
Contribution margin
$ 19,200.00
$ 18,000.00
$ 1,200.00
Favourable
Fixed Costs:
Supervisory Salaries
$ 8,500.00
$ 9,400.00
$ 900.00
Unfavourable
Insurance
$ 4,200.00
$ 3,000.00
$ 1,200.00
Favourable
Equipment depreciation
$ 1,500.00
$ 1,500.00
$ -
Neither Favourable nor Unfavourable
Total Fixed Cost
$ 14,200.00
$ 13,900.00
$ 300.00
Favourable
Net Income
$ 5,000.00
$ 4,100.00
$ 900.00
Unfavourable