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 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.

 

 Explanation:

Revenue ($365.00 × 105) = $38,325

Wages and salaries ($8,000 + ($125.00 × 105)) = $21,125

Supplies ($3.00 × 105) = $315

Equipment rental ($1,800 + ($32.00 × 105)) = $5,160

Miscellaneous ($630 + ($1.80 × 105)) = $819