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)		350
Revenue ($460.00q)	$	161,000
Expenses:
Wages and salaries ($11,500 + $124.00q)		54,900
Supplies ($4.00q)		1,400
Equipment rental ($2,300 + $24.00q)		10,700
Insurance ($4,000)		4,000
Miscellaneous ($540 + $1.50q)		1,065
Total expense		72,065
Net operating income	$	88,935

During May, the company’s actual activity was 340 diving-hours.

Required:

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

Answer 1

Puget Sound Drivers
Planning Budget
For the month ended May 31
Actual driving hours	340
Revenue ($460.00 X 340)	$ 1,56,400
Expenses:
Wages and Salaries [$11,500 + ($124.00 X 340)]	$     53,660
Supplies($4.00 X 340)	$       1,360
Equipment rental [$2,300 + ($24.00 X 340)]	$     10,460
Insurance ($4,000)	$       4,000
Miscellaneous [$540 + ($1.50 X 340)]	$       1,050
Total expense	$     70,530
Net operating income	$     85,870