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)		300
Revenue ($470.00q)	$	141,000
Expenses:
Wages and salaries ($11,800 + $122.00q)		48,400
Supplies ($5.00q)		1,500
Equipment rental ($2,300 + $21.00q)		8,600
Insurance ($4,000)		4,000
Miscellaneous ($520 + $1.46q)		958
Total expense		63,458
Net operating income	$	77,542

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
Revenue
Expenses:
Wages and salaries
Supplies
Equipment rental
Insurance
Miscellaneous
Total expense
Net operating income

Answer 1

Puget Sound Drivers
Flexible Budget
For the month ended May 31
	290 hours
Revenue($470*290)	$1,36,300
Expenses:
Wages & Salaries($11,800+ $122*290)	$47,180
Supplies($5*290)	$1,450
Equipment Rental($2,300+ $21*290)	$8,390
Insurance	$4,000
Miscellaneous($520+ $1.46*290)	$943
Total Expenses	$61,963
Net Operating Income	$74,337