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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)
400
Revenue ($450 . 00q)
$180,000
Expenses:
Wages and salaries ($11,800 + $126.00q)
62,200
Supplies ($3.00q)
1,200
Equipment rental ($2,500 + $23.00q)
11,700
Insurance ($4,000)
4,000
Miscellaneous ($540 + $1.48q)
1,132
Total expense
80,232
Net operating income
$99,768
During May, the company's actual activity was 390 diving-hours.
Required: Prepare a flexible budget for May.
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