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FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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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) | 250 | |
Revenue ($470.00q) | $ | 117,500 |
Expenses: | ||
Wages and salaries ($11,200 + $124.00q) | 42,200 | |
Supplies ($5.00q) | 1,250 | |
Equipment rental ($2,400 + $24.00q) | 8,400 | |
Insurance ($4,100) | 4,100 | |
Miscellaneous ($510 + $1.48q) | 880 | |
Total expense | 56,830 | |
Net operating income | $ | 60,670 |
During May, the company’s actual activity was 240 diving-hours.
Required:
Prepare a flexible budget for May.
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