Puget Sound Divers is a company that provides diving services such as underwater

Question

Puget Sound Divers is a company that provides diving services such as underwater ship repairs to clients in the Puget Sound area. The company’s planning budget for May appears below:

During May, the company’s actual activity was 340 diving-hours.

Required:

Prepare a flexible budget for May. (Round your answers to the nearest whole number.)

Puget Sound Divers
Planning Budget
For the Month Ended May 31 Budgeted diving-hours (q) 350 Revenue ($460.00q) $ 161,000 Expenses: Wages and salaries ($11,500 + $124.00q) 54,900 Supplies ($4.00q) 1,400 Equipment rental ($2,300 + $24.00q) 10,700 Insurance ($4,000) 4,000 Miscellaneous ($540 + $1.50q) 1,065 Total expense 72,065 Net operating income $ 88,935

Explanation / Answer

Puget Sound Drivers Planning Budget For the month ended May 31 Actual driving hours 340 Revenue ($460.00 X 340) $ 1,56,400 Expenses: Wages and Salaries [$11,500 + ($124.00 X 340)] $     53,660 Supplies($4.00 X 340) $       1,360 Equipment rental [$2,300 + ($24.00 X 340)] $     10,460 Insurance ($4,000) $       4,000 Miscellaneous [$540 + ($1.50 X 340)] $       1,050 Total expense $     70,530 Net operating income $     85,870

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