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 ($440.00q)	$	176,000
Expenses:
Wages and salaries ($11,300 + $126.00q)		61,700
Supplies ($5.00q)		2,000
Equipment rental ($2,200 + $21.00q)		10,600
Insurance ($3,900)		3,900
Miscellaneous ($510 + $1.46q)		1,094
Total expense		79,294
Net operating income	$	96,706

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.)

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

Answer 1