Pronto Plumbing Company is a newly formed company specializing in plumbing services for home and business. The owner, Paul Pronto, 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. Paul 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 2010.

Instructions(a) Prepare a responsibility report for the first quarter of 2010 for the Home Plumbing Services segment.(b) Write a memo to Paul Pronto discussing the principles that should be used when preparing performancereports.

Transcribed Image Text:

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