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)		100
Revenue ($365.00q)	$	36,500
Expenses:
Wages and salaries ($8,000 + $125.00q)		20,500
Supplies ($3.00q)		300
Equipment rental ($1,800 + $32.00q)		5,000
Insurance ($3,400)		3,400
Miscellaneous ($630 + $1.80q)		810
Total expense		30,010
Net operating income	$	6,490

  

Required:

During May, the company’s activity was actually 105 diving-hours. Complete the following flexible budget for that level of activity.

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Answer 1

Answer-

PUGET SOUND DRIVERS
FLEXIBLE BUDGET
For the month ended May 31
Particulars		Amount
		$
Revenue	105 diving hours*$365 per hour	38325
Less:-Expenses
Wages & salaries	(105 diving hours*$125 per hour)+$8000	21125
Supplies	105 diving hours*$3 per hour	315
Equipment rental	(105 diving hours*$32 per hour)+$1800	5160
Insurance		3400
Miscellaneous	(105 diving hours*$1.80 per hour)+$630	819
Total Expenses		30819
Net Opreating income		7506