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)		250
Revenue ($390.00q)	$	97,500
Expenses:
Wages and salaries ($11,400 + $120.00q)		41,400
Supplies ($5.00q)		1,250
Equipment rental ($2,200 + $22.00q)		7,700
Insurance ($4,100)		4,100
Miscellaneous ($510 + $1.42q)		865
Total expense		55,315
Net operating income	$	42,185

During May, the company’s actual activity was 240 diving-hours.

Required:

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

Puget Sound Divers
Flexible Budget
For the Month Ended May 31
Revenue
Expenses:
Wages and salaries
Supplies
Equipment rental
Insurance
Miscellaneous
Total expense	0
Net operating income	$0

Answer 1

Puget Sound Divers
Flexible Budget
For the Month Ended May 31
Revenue	$     93,600
Expenses:
Wages and salaries	$     40,200
Supplies	$      1,200
Equipment rental	$      7,480
Insurance	$      4,100
Miscellaneous	$         851
Total expense	$     53,831
Net operating income	$     39,769

Working

Puget Sound Divers
Flexible Budget
For the Month Ended May 31
Revenue	=240*390
Expenses:
Wages and salaries	=+(11400)+(120*240)
Supplies	=240*5
Equipment rental	=+(2200)+(22*240)
Insurance	4100
Miscellaneous	=+(510)+(1.42*240)