Question

Exercise 9-1 Prepare a Flexible Budget [LO9-1]

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:

Puget Sound Divers Planning Budget For the Month Ended May 31
Budgeted diving-hours (q)		350
Revenue ($380.00q)	$	133,000
Expenses:
Wages and salaries ($11,200 + $124.00q)		54,600
Supplies ($4.00q)		1,400
Equipment rental ($2,200 + $25.00q)		10,950
Insurance ($4,100)		4,100
Miscellaneous ($530 + $1.44q)		1,034
Total expense		72,084
Net operating income	$	60,916

During May, the company’s actual activity was 340 diving-hours.

Required:

Prepare a flexible budget for May. (Round your answers to the nearest whole number.)

	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

Anjwer Puget Sound Divev Flenible budgut For t5e Mont Endef Mouy 31 Actual diving hours 340 hr3 Rewenue 38o x340) $129,200 Less: eapunse $53,360 hge and Salariey 200+24x340) Supplie (itx 340 1,360 Euipment rental ,200+25x3410700 $4100 Insuvauce Higcellaneouy (530+144340 00 $70,540 o540 $58,660 TOto enpense Ntt operalng niome