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 ($11,400 + $128.00q) 62,600 Supplies ($5.00q) 2,000 Equipment rental ($2,200 + $24.00q) 11,800 Insurance ($4,000) 4,000 Miscellaneous ($530 + $1.44q) 1,106 Total expense 81,506 Net operating income $ 106,494

Explanation / Answer

Answer:

Puget Sound Divers

Flexible Budget

For the Month Ended May 31

Revenue ($470.*390)

183300

Expenses:

Wages and salaries($11,400 + (128x390)

61320

Supplies (5*390)

1950

Equipment rental (2200 + (24*390)

11560

Insurance

4000

Miscellaneous (530+ (1.44*390)

1091.6

Total expense

79921.6

Net operating income

103378.4

Puget Sound Divers

Flexible Budget

For the Month Ended May 31

Revenue ($470.*390)

183300

Expenses:

Wages and salaries($11,400 + (128x390)

61320

Supplies (5*390)

1950

Equipment rental (2200 + (24*390)

11560

Insurance

4000

Miscellaneous (530+ (1.44*390)

1091.6

Total expense

79921.6

Net operating income

103378.4

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