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 (q) 300
Revenue ($440.00q) $ 132,000
Expenses:
Wages and salaries ($11,400 + $128.00q) 49,800
Supplies ($5.00q) 1,500
Equipment rental ($2,400 + $25.00q) 9,900
Insurance ($3,800) 3,800
Miscellaneous ($510 + $1.48q) 954
Total expense 65,954
Net operating income $ 66,046
During May, the company’s actual activity was 290 diving-hours.
prepare a flexible budget for May.

Answer 1

$63,240.8

Step-by-step explanation:

Preparation for a flexible budget for May

Actual diving hours 290

Revenue (290*$440) $127,600

Expenses:

Wages and salaries 48,520

(11,400+290*128)

Supplies 1,450

(290*5)

Equipment rental 9,650

(2400+290*25)

Insurance 3,800

Miscellaneous 939.2

(510+290*1.48)

Total expense $64,359.2

Net Operating income $63,240.8

($127,600-$64,359.2)

Therefore the Net Operating income for the flexible budget for May will be $63,240.8.