Budgetary Control and Responsibility Accounting

The Sports Equipment Division of Harrington Company is operated as a profit center. Sales for the division were budgeted for 2020 at $900,000. The only variable costs budgets for the division were cost of goods sold ($440,000) and selling and administrative ($60,000). Fixed costs were budgeted at $100,000 for cost of goods sold, $90,000 for selling and administrative, and $70,000 for noncontrollable fixed costs. Actual results for these items were.

The South Division of Wiig Company reported the following data for the current year.

The Dinkle and Frizell Dental Clinic provides both preventive and orthodntic dental services. The two owners, Reese Dinkle and Anita Frizell, operate the clinic as two separate investment centers: preventive Services and Orthodontic Services. Each of them is in charge of one of the centers: Reese for preventive Services and Anita for Orthodontic Services. Each month, they prepare an income statement for the two centers to evaluate performance and make decisions about how to improve the operational efficiency and profitability of the clinic.

The Ferrell Transportation Company uses a responsibility reporting system to measure the performance of its three investment centers: Planes, Taxis, and Limos, Segment performance is measured using a system of responsibility reports and return on investment calculations. The allocation of resources within the company and the segment managers bonuses are based in part on the results shown in these reports. Recently, the company was the victim of a computer virus that deleted portions of the company's accounting records. This was discovered when the current period's responsibility reports were being prepared. The printout of the actual operating results appeared as follows.