Pronto Plumbing Company is a newly formed company that specializes 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 both segments share basic selling and administrative duties. 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. 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 Paul Pronto in which you discuss the principles that he should use when preparing performance reports.

BudgetActual $31,500 Service revenue $30,000 Allocated portion of costs Building depreciation Advertising Billing Property taxes 11,000 5,000 3,500 1,200 1,500 10,000 4,000 4,000 1,000 Materials and supplies Supervisory salaries Insurance 3,000 1,000 1,300 10,500 3,300 Gas and oil Equipment depreciation 3,400 1,300 1,600