Kirkland Plumbing Company is a newly formed company specializing in plumbing services for home and business. The owner, Lenny Kirkland, had divided the company into two segments: Home Plumbing Services and Business Plumbing Services. 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 Plumbing Services segment for the first quarter of 2014.

Instructions
(a) Prepare a responsibility report for the first quarter of 2014 for the Home Plumbing Services segment.
(b) Write a memo to Lenny Kirkland discussing the principles that should be used when preparing performancereports.

Transcribed Image Text:

Budget $25,000 Actual Service revenu Allocated portion of $26,000 Building depreciation 11,000 5,000 3,500 1,200 1,600 9,000 4,000 3,000 2,800 1,500 11,000 4,200 3,000 1,000 1,200 9,500 3,600 3,250 3,400 1,300 Advertising Billing Property taxes Material and supplies Supervisory salaries Insurance Wages Gas and oil Equipment depreciation