Exercise 8-1 Prepare a Flexible Budget [LO8-1] Puget Sound Divers is a company t

Question

Exercise 8-1 Prepare a Flexible Budget [LO8-1]

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:

During May, the company’s activity was actually 340 diving-hours. Complete the following flexible budget for that level of activity. (Round your answers to nearest whole dollar.)

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:

Explanation / Answer

Puget Sound Divers Planning Budget For the Month Ended May 31 PU/FC Amount Budgeted Diving Hours 350 Revenue 420 147000 Expense: Wages & Salaries (11400+130) 56900 Supplies 4.00 1400 Equipment Rental (2200+22) 9900 Insurance 4000 4000 Misc (510+1.50) 1035 Total Expense 73235 Net Operating Income 73765 Flexible Budget: Puget Sound Divers Planning Budget For the Month Ended May 31 PU/FC Amount Explanation Budgeted Diving Hours 340 Revenue 420 142800 340*420 Expense: Wages & Salaries (11400+130) 55600 11400+(340*130) Supplies 4.00 1360 340*4 Equipment Rental (2200+22) 9680 2200+(340*22) Insurance 4000 4000 4000 Misc (510+1.50) 1020 510+(340*1.50) Total Expense 71660 Net Operating Income 71140

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