Problem

Gator Divers is a company that provides diving services such as underwater ship repairs to...

Gator Divers is a company that provides diving services such as underwater ship repairs to clients in the Tampa Bay area. The company’s planning budget for March appears below:

Gator Divers

Planning Budget

For the Month Ended March 31

Budgeted diving-hours (q)

200

Revenue ($380.00q)

$ 76,000

Expenses:

     Wages and salaries( $ 12,000 + $ 130.00 q).

38,000

     Supplies ($ 5,00 q)

1,00

     Equipment rental ($ 2,500 + $ 26.00q)

7,700

     Insurance ( $ 4,200)

4,200

     Miscellaneous ($ 540 + $1.50q)

840

Total expense

51,740

Net operating income

$ 24,260

Required:

During March, the company’s activity was actually 190 diving-hours. Prepare a flexible budget for that level of activity.

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Solutions For Problems in Chapter 9