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 ($410.00q)	$	123,000
Expenses:
Wages and salaries ($11,900 + $124.00q)		49,100
Supplies ($6.00q)		1,800
Equipment rental ($2,200 + $20.00q)		8,200
Insurance ($4,100)		4,100
Miscellaneous ($510 + $1.46q)		948
Total expense		64,148
Net operating income	$	58,852

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 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

Puget Sound Divers
Planning Budget
For the Month Ended May 31
Actual diving hours	290
Revenue ($ 410*290)	118,900
Expenses:
Wages and salaries ($11,900 + ($124 x 290))	47,860
Supplies ($6 x 290)	1,740
Equipment rental ($2,200 + ($20 x 290))	8,000
Insurance	4100
Miscellaneous ($510 + ($1.46 x 290))	933
Total expense	62,633
Net operating income	56,267