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: Puget Sound Divers Planning Budget For the Month Ended May 31 Budgeted diving-hours (q) 200 Revenue ($430.00q) $ 86,000 Expenses: Wages and salaries ($11,600 + $126.00q) 36,800 Supplies ($5.00q) 1,000 Equipment rental ($2,100 + $20.00q) 6,100 Insurance ($3,900) 3,900 Miscellaneous ($530 + $1.42q) 814 Total expense 48,614 Net operating income $ 37,386 During May, the company’s actual activity was 190 diving-hours. Required: Prepare a flexible budget for May

Explanation / Answer

Prepare a flexible budget for May

Actual activity 190 driving hours Revenue 81700 Expense Wages and salaries 35540 Supplies 950 Equipment rent 5900 Insurance 3900 Miscellaneous 799.80 Total expense 47089.80 Net operating income 34610.20

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