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 ($420.00q)	$	126,000
Expenses:
Wages and salaries ($11,800 + $124.00q)		49,000
Supplies ($5.00q)		1,500
Equipment rental ($2,300 + $23.00q)		9,200
Insurance ($3,900)		3,900
Miscellaneous ($500 + $1.42q)		926
Total expense		64,526
Net operating income	$	61,474

During May, the company’s actual activity was 290 diving-hours.

Answer 1

Answer:-

Puget Sound drivers
Flexible Budget
For the month of Ended May 31
Particulars		Amount
		$
Revenue (a)	290 diving hours*$420 per hour	121800
Variable expenses:-
Wages & Salaries	290 diving hours*$124 per hour	35960
Supplies	290 diving hours*$5 per hour	1450
Equipment rental	290 diving hours*$23 per hour	6670
Miscellenous	290 diving hours*$1.42 per hour	412
Total variable costs (b)		44492
Fixed Expenses
Wages & Salaries		11800
Equipment rental		2300
Insurance		3900
Miscellenous		500
Total fixed costs (c)		18500
Net Opreating income d=a-(b+c)		58808