Manning Plumbing Company is a newly formed company specializing in plumbing services for home and business. The owner, Peyton Manning, 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. Peyton 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 2012.

Instructions(a) Prepare a responsibility report for the first quarter of 2012 for the Home Plumbing Services segment.(b) Write a memo to Peyton Manning discussing the principles that should be used when preparing performancereports.

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Budgeted Actual $25,000 $26,000 Service revenue Allocated portion of: Building depreciation Advertising Billing Property taxes Material and supplies Supervisory salaries 11,000 11,000 5,000 4,200 3,500 1,200 3,000 1,000 1,500 1,200 9,000 9,400 4,000 Insurance 3,500 3,300 Wages 3,000 Gas and oil 2,700 3,400 Equipment depreciation 1,600 1,300