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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
Revenue ($365.00q).................................
$36,500
Expenses
Wages and salaries ($8,000 + 125.00q)........
$20,500
Supplies ($3.00q).................................
300
Equipment rental ($1,800 + $32.00q)..........
5,000
Insurance ($3,400)................................
3,400
Miscellaneous ($630 + $1.80q).................
810
Total expense........................................
$30,010
Net operating income...............................
$ 6,490
Required:
During May, the company's activity was actually 105 diving-hours. Prepare a flexible budget for that level of activity.
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