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 ($470.00q)	$	141,000
Expenses:
Wages and salaries ($12,000 + $128.00q)		50,400
Supplies ($4.00q)		1,200
Equipment rental ($2,100 + $22.00q)		8,700
Insurance ($3,900)		3,900
Miscellaneous ($520 + $1.50q)		970
Total expense		65,170
Net operating income	$	75,830

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.)

Answer 1

Actual diving hours	290
Revenues	136,300
Expenses
Wages	49,120
Supplies	1160
Equipment	8480
Insurance	3900
Miscellaneous	955
Total expense	63,615
Net operating income	72,685