Question

Exercise 10-1 Prepare a Flexible Budget [LO10-1] 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: 300 $120,000 Puget Sound Divers Planning Budget For the Month Ended May 31 Budgeted diving-hours (9) Revenue ($420.00) Expenses: Wages and salaries ($12,000+ $126.009) Supplies ($5.009) Equipment rental ($2,200 + $24.000) Insurance ($4,000) Miscellaneous ($510 + $1.449) Total expense Net operating income 49,800 1,500 9,400 4,000 942 65.642 $ 60,358 Required: During May, the company's activity was actually 290 diving-hours. Complete the following flexible budget for that level of activity. (Round your final answer to nearest dollar amount.) 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

Answer 1

solution; Puget Sound Divers Flexible budget For the month ended May 31. fixed cost | Vairable rate flexible budget ab a+b*290 Revenue 420.00 121,800 Expenses: Wages and salaries 12000 126.00 48,540 Supplies 5.00 1,450 Equipment rental 2200 24.00 9,160 Insurance 4000 4,000 Miscellaneous 510 1.44 928 Total expense 18,710 156.44 64,078 Net operating income 57,722