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 (g) 300 Revenue ($480.00g) Expenses: $144,000 salaries(s11,700 $126.00g) Wages and Supplies ($5.00g) Equipment rental ($2,000 $22.00g) Insurance ($3,900) Miscellaneous ($520 + $1.48g) 49,500 1,500 8,600 3,900 964 64,464 $79,536 Total expense Net operating income 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 number.)

Answer 1

See below.

Step-by-step explanation:

Lets summarize the information first,

Revenue = 480/hour

Salaries = 11700 + 126/ hour

Supplies = 5/hour

Equipment Rental = 2000 + 22/ hour

Insurance = 3900

Miscellaneous = 520 + 1.48/hour

Now we flex these standard costs to to activity level of 290 diving hours,

Revenue (480 * 290) 139,200

Less:

Salaries and wages (11,700 + 126*290) 48,240

Supplies (5 * 290) 1,450

Equipment rental (2000 + 22*290) 8,380

Insurance 3,900

Miscellaneous (520+ 1.48*290) 949.2

Budgeted profits $76,280.8

Hope that helps.