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:

Puget Sound Divers Planning Budget For the Month Ended May 31
Budgeted diving-hours (q)		200
Revenue ($430.00q)	$	86,000
Expenses:
Wages and salaries ($11,300 + $122.00q)		35,700
Supplies ($4.00q)		800
Equipment rental ($2,100 + $24.00q)		6,900
Insurance ($3,900)		3,900
Miscellaneous ($500 + $1.48q)		796
Total expense		48,096
Net operating income	$	37,904

During May, the company’s actual activity was 190 diving-hours.

Required:

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

Answer 1

Puget Sound Divers
Flexible Budget
For the Month Ended May 31
Actual diving-hours (q)		190
Revenue ($430.00 x 190)	$	81,700
Expenses:
Wages and salaries ($11,300 + $122.00 x 190)		34,480
Supplies ($4.00 x 190)		760
Equipment rental ($2,100 + $24.00 x 190)		6,660
Insurance ($3,900)		3,900
Miscellaneous ($500 + $1.48 x 190)		781
Total expense		46,581
Net operating income	$	35,119

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