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:
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Puget Sound Divers
Planning Budget
For the Month Ended May 31
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Budgeted diving-hours (q)........................
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100
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Revenue ($365.00q).................................
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$36,500
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Expenses
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Wages and salaries ($8,000 + 125.00q)........
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$20,500
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Supplies ($3.00q).................................
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300
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Equipment rental ($1,800 + $32.00q)..........
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5,000
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Insurance ($3,400)................................
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3,400
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Miscellaneous ($630 + $1.80q).................
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810
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Total expense........................................
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$30,010
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Net operating income...............................
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$ 6,490
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Required:
During May, the company's activity was actually 105 diving-hours. Prepare a flexible budget for that level of activity.