Exercise 9-1 Prepare a Flexible Budget [Lo9-1) Puget Sound Divers is a company t
ID: 2576716 • Letter: E
Question
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 Budgeted diving-hours (q) 100 36,500 Revenue ($365.e0q) Expenses: Wages and salaries ($8,800 $125.00q) Supplies ($3.00q) Equipment rental ($1,800 $32.00q) Insurance ($3,400) Miscellaneous ($630$1.88q) 20,508 300 5,000 3,400 810 30,010 6,490 Total expense Net operating income During May, the company's actual activity was 105 diving hours.
Explanation / Answer
Answer:
Puget Sound Divers
Flexible Budget
For the Month Ended May 31
Actual diving-hours
105
Revenue ($365.00q)
38325
Expenses:
Wages and salaries ($8,000 + $125.00q)
21125
Supplies ($3.00q)
315
Equipment rental ($1,800 + $32.00q)
5160
Insurance ($3,400)
3400
Miscellaneous ($630 + $1.80q)
819
Total expense
30,819
Net operating income
$ 7,506
Working notes for the answer
Puget Sound Divers
Flexible Budget
For the Month Ended May 31
Actual diving-hours
105
Revenue ($365.00q)
365x105
Expenses:
Wages and salaries ($8,000 + $125.00q)
8000+(125x105)
Supplies ($3.00q)
3x105
Equipment rental ($1,800 + $32.00q)
1800+(32x105)
Insurance ($3,400)
3400
Miscellaneous ($630 + $1.80q)
630+ 1.80*105
Total expense
30,819
Net operating income
$ 7,506
Puget Sound Divers
Flexible Budget
For the Month Ended May 31
Actual diving-hours
105
Revenue ($365.00q)
38325
Expenses:
Wages and salaries ($8,000 + $125.00q)
21125
Supplies ($3.00q)
315
Equipment rental ($1,800 + $32.00q)
5160
Insurance ($3,400)
3400
Miscellaneous ($630 + $1.80q)
819
Total expense
30,819
Net operating income
$ 7,506
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