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 390 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) 400 Revenue ($470.00q) $ 188,000 Expenses: Wages and salaries ($11,000 + $122.00q) 59,800 Supplies ($6.00q) 2,400 Equipment rental ($2,400 + $24.00q) 12,000 Insurance ($3,900) 3,900 Miscellaneous ($500 + $1.44q) 1,076 Total expense 79,176 Net operating income $ 108,824 Puget Sound Divers Flexible Budget For the Month Ended May 31 Revenue Expenses Wages and salaries Supplies Equipment rental Insurance Miscellaneous Total expense Net operating income

Explanation / Answer

Flexible budget Actual diving-hours (q) 390 Revenue ($470.00q) 183300 Expenses: Wages and salaries ($11,000 + $122.00q) 58580 Supplies ($6.00q) 2340 Equipment rental ($2,400 + $24.00q) 11760 Insurance ($3,900) 3900 Miscellaneous ($500 + $1.44q) 1062 Total expense 77642 Net operating income 105658

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