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 ($420.00q) | $ | 126,000 |
| Expenses: | ||
| Wages and salaries ($11,400 + $126.00q) | 49,200 | |
| Supplies ($6.00q) | 1,800 | |
| Equipment rental ($2,300 + $22.00q) | 8,900 | |
| Insurance ($3,900) | 3,900 | |
| Miscellaneous ($550 + $1.48q) | 994 | |
| Total expense | 64,794 | |
| Net operating income | $ | 61,206 |
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 | |
| Budgeted diving-hours (q) | 290 |
| Revenue ($420.00q) | $121,800 |
| Expenses: | |
| Wages and salaries ($11,400 + $126.00q) | $ 47,940 |
| Supplies ($6.00q) | $ 1,740 |
| Equipment rental ($2,300 + $22.00q) | $ 8,680 |
| Insurance ($3,900) | $ 3,900 |
| Miscellaneous ($550 + $1.48q) | $ 979 |
| Total expense | $ 63,239 |
| Net operating income | $ 58,561 |
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