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) 400 Revenue ($400.00q) $ 160,000 Expenses: Wages and salaries ($11,400 + $128.00q) 62,600 Supplies ($5.00q) 2,000 Equipment rental ($2,100 + $20.00q) 10,100 Insurance ($3,900) 3,900 Miscellaneous ($510 + $1.50q) 1,110 Total expense 79,710 Net operating income $ 80,290 During May, the company’s actual activity was 390 diving-hours.

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

Answer 1

Flexible budget for May :

Puget Sound Divers
Flexible Budget
For the Month Ended May 31
Actual Diving Hours	390
Revenue (390*$400)	$156000
Expense :
Wages and Salaries ($11400+390*$128)	61320
Supplies (390*$5)	1950
Equipment rental ($2100+390*$20)	9900
Insurance	3900
Miscellaneous ($510+390*$1.5)	1095
Total Expenses	78165
Net Operating Income	$77835