In: Accounting
Exercise 9-1 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 |
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Budgeted diving-hours (q) | 250 | |
Revenue ($390.00q) | $ | 97,500 |
Expenses: | ||
Wages and salaries ($11,000 + $126.00q) | 42,500 | |
Supplies ($5.00q) | 1,250 | |
Equipment rental ($2,100 + $26.00q) | 8,600 | |
Insurance ($3,800) | 3,800 | |
Miscellaneous ($540 + $1.48q) | 910 | |
Total expense | 57,060 | |
Net operating income | $ | 40,440 |
During May, the company’s actual activity was 240 diving-hours.
Required:
Prepare a flexible budget for May. (Round your answers to the nearest whole number.)
Puget Sound Drivers | ||
Flexible Budget Report | ||
For the month ended May 31 | ||
Flexible Budget | ||
Actual Driving hours | (q) | 240 |
Revenue | ($390 X q) | $ 93,600 |
Expenses: | ||
Wages and salaries | $11000 + ($126 * q) | $ 41,240 |
Supplies | ($5 * q) | $ 1,200 |
Equipment rental | $2100 + ($26 * q) | $ 8,340 |
Insurance | $ 3,800 | $ 3,800 |
Miscellaneous | $540 + ($1.48 * q) | $ 895 |
Total expense | $ 55,475 | |
Net operating income | $ 38,125 |