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 (9) 250 $115,000 Revenue $460.009) Expenses: Wages and salaries ($11,900 + $126.009) Supplies ($4.009) Equipment rental ($2,100 + $22.00) Insurance ($3,900) Miscellaneous ($500 + $1.429) Total expense Net operating income 43,400 1,000 7,600 3,900 855 56,755 $ 58,245 During May, the company's actual activity was 240 diving-hours. Required: Prepare a flexible budget for May. (Round your answers to the nearest whole number.)

Answer 1

Solution

Puget Sound Divers
Flexible Budget
For the Month Ended May 31
Actual diving hours	240
Revenue	$    110,400
Expenses:
Wages and salaries	$      42,140
Supplies	$          960
Equipment rental	$        7,380
Insurance	$        3,900
Miscellaneous	$          841
Total expense	$      55,221
Net operating income	$      55,179

Working

		A= Variable portion	B= Fixed portion	C= Units	D=(C x A)+B
Revenue		460		240	$    110,400
Expenses:				240
Wages and salaries		126	11900	240	$      42,140
Supplies		4	0	240	$          960
Equipment rental		22	2100	240	$        7,380
Insurance		0	3900	240	$        3,900
Miscellaneous		1.42	500	240	$          841
Total expense				240	$      55,221
Net operating income				240	$      55,179