Introduction To Managerial Accounting
8th Edition
ISBN: 9781259917066
Author: BREWER, Peter C., Garrison, Ray H., Noreen, Eric W.
Publisher: Mcgraw-hill Education,
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Chapter 9, Problem 1E
Prepare a Flexible Budget
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:
During May, the company’s actual activity was 105 diving-hours.
Required:
Using Exhibit 9−5 as your guide, prepare a flexible budget for May.
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Exercise 9-1 (Algo) Prepare a Flexible Budget [LO9-1]
Puget Sound Divers provides diving services, such as underwater ship repairs, to its clients. The company's planning budget for May
appears below:
Puget Sound Divers
Planning Budget
For the Month Ended May 31
Budgeted diving-hours (g)
Revenue ($460.00g)
Expenses:
Wages and salaries ($11,200 + $128.00q)
Supplies ($4.00q)
Equipment rental ($2,400 + $22.00q)
Insurance ($3,900)
Miscellaneous ($500 + $1.44q)
Total expenses
Net operating income
250
$ 115,000
43,200
1,000
7,900
3,900
860
56,860
$ 58,140
During May, the company's actual activity was 240 diving-hours.
Preparing a flexible budget and performance report
This continues the Piedmont Computer Company situation from Chapter 22. Assume Piedmont Computer Company has created a standard cost card for the PCC model tablet computer, with overhead allocated based on direct labor hours:
During the month of September, Piedmont Computer Company incurred the following costs while manufacturing 1,100 PCC model tablets;
Requirements
Prepare a flexible budget for September for 900, 1,000, and 1,100 PCC model tablets. The tablet has a standard sales price of $675. List variable costs separately.
Using 1,000 PCC model tablets for the static budget, prepare a flexible budget performance report for September. Total sales revenue for the month was $767,800. The company sold 1,100 tablets.
What insights can the management of Piedmont Computer Company draw from the performance report?
Puget Sound Divers provides diving services, such as underwater ship repairs, to its clients. The company's planning budget for May
appears below:
Puget Sound Divers
Planning Budget
For the Month Ended May 31
Budgeted diving-hours (q)
Revenue ($400.00g)
Expenses:
Wages and salaries ($11,100+ $124.00g)
Supplies ($4.00g)
Equipment rental ($2,300+ $24.00g)
Insurance ($3,800)
Miscellaneous ($500+ $1.48q)
Total expenses
Net operating income
During May, the company's actual activity was 240 diving-hours.
Required:
Prepare a flexible budget for May.
Note: Round your answers to the nearest whole number.
250
$ 100,000
42,100
1,000
8,300
3,800
870
56,070
$ 43,930
Chapter 9 Solutions
Introduction To Managerial Accounting
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