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)		250
Revenue ($380.00q)	$	95,000
Expenses:
Wages and salaries ($11,700 + $124.00q)		42,700
Supplies ($5.00q)		1,250
Equipment rental ($2,400 + $24.00q)		8,400
Insurance ($3,900)		3,900
Miscellaneous ($510 + $1.46q)		875
Total expense		57,125
Net operating income	$	37,875

  

Required:

During May, the company’s activity was actually 240 diving-hours. Complete the following flexible budget for that level of activity.

Puget Sound Divers
Flexible Budget
For the Month Ended May 31
Revenue
Expenses:
Wages and salaries
Supplies
Equipment rental
Insurance
Miscellaneous
Total expense	0
Net operating income	$0

Answer 1

Puget Sound Divers
Flexible Budget
For the month ended May 31
Revenue (240*$380)	$ 91,200.00
Expenses
Wages and salaries ((240*$124)+$11,700)	$ 41,460.00
Supplies (240*$5)	$    1,200.00
Equipment rental ((240*$24)+$2,400)	$    8,160.00
Insurance	$    3,900.00
Misc. ((240*$1.46)+$510)	$        860.40
Total expenses	$ 55,580.40
Net operating income	$ 35,619.60