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 activity was actually 190 diving-hours. Complete the following flexible budget for that level of activity.

2.

Jake’s Roof Repair has provided the following data concerning its costs:

   

For example, wages and salaries should be $21,400 plus $15.00 per repair-hour. The company expected to work 2,800 repair-hours in May, but actually worked 2,700 repair-hours. The company expects its sales to be $52.00 per repair-hour.

   

Compute the company’s activity variances for May. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.)

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 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 :

Prepare activity variance :

Repair hours Revenue 72200 Expenses Wages and salaries 36700 Supplies 760 Equipmental rent 7040 Insurance 4000 Miscellaneous 777.40 Total expense 49277.40 Net operating income 22922.60

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