1 Gator Divers is a company that provides diving services such as underwater shi
ID: 2457038 • Letter: 1
Question
1
Gator Divers is a company that provides diving services such as underwater ship repairs to clients in the Tampa Bay area. The company’s planning budget for March appears below:
Gator Divers
Planning Budget
For the Month Ended March 31
Budgeted diving-hours (q)
300
Revenue ($450.00q)
$
135,000
Expenses:
Wages and salaries ($11,400 + $128.00q)
49,800
Supplies ($5.00q)
1,500
Equipment rental ($2,200 + $26.00q)
10,000
Insurance ($3,900)
3,900
Miscellaneous ($510 + $1.48q)
954
Total expense
66,154
Net operating income
$
68,846
Required:
During March, the company’s activity was actually 290 diving-hours. Complete the flexible budget for that level of activity. (Round your answers to nearest whole dollar.)
Gator Divers
Flexible Budget
For the Month Ended March 31
Revenue
Expenses:
Wages and salaries
Supplies
Equipment rental
Insurance
Miscellaneous
Total expense
Net operating income
Gator Divers is a company that provides diving services such as underwater ship repairs to clients in the Tampa Bay area. The company’s planning budget for March appears below:
Explanation / Answer
Gator Divers
Flexible Budget
For the Month ended March 31
Activity level -diving hours 290
Revenue ($450x q) $130500
Expenses:-
Wages and salaries ($11400 + $128xq) $ 48520
Supplies ( $5 x q) $ 1450
Equipment rental ($2200+$26xq) $ 9740
Insurance ($3900) $ 3900
Miscelleanous($510+$1.48 x q) $ 939
------------
Total expense $ 64549
-------------
Net Operating Income $ 65951
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