uget 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 During May, the company’s actual activity was 105 diving-hours. Required: Prepare a flexible budget for May.
uget 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 During May, the company’s actual activity was 105 diving-hours. Required: Prepare a flexible budget for May.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Exercise 9-1 (Static) Prepare a Flexible Budget [LO9-1]
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 |
During May, the company’s actual activity was 105 diving-hours.
Required:
Prepare a flexible budget for May.
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