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 (g) 300 $ 138,000 Revenue ($460.00) Expenses! Wages and salaries ($11,100 + $128.00g) Supplies ($5.009) Equipment rental ($2,200 + $23.00) Insurance ($3,900) Miscellaneous ($540 + $1.489) Total expense Net operating income 49,500 1,500 9.100 3.900 984 64.984 $ 73,016 During May, the company's actual activity was 290 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 Actual diving-hours 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
Actual diving hours	290
Revenue	$    133,400
Expenses:
Wages and salaries	$      48,220
Supplies	$        1,450
Equipment rental	$        8,870
Insurance	$        3,900
Miscellaneous	$          969
Total expense	$      63,409
Net operating income	$      69,991

.Working

		A= Variable portion	B= Fixed portion	C= Units	D=(C x A)+B
Revenue		460		290	$    133,400
Expenses:				290
Wages and salaries		128	11100	290	$      48,220
Supplies		5	0	290	$        1,450
Equipment rental		23	2200	290	$        8,870
Insurance		0	3900	290	$        3,900
Miscellaneous		1.48	540	290	$          969
Total expense				290	$      63,409
Net operating income				290	$      69,991