Puget Sound Divers is a company that provides diving services such as underwater ship repairs to clientsin the Puget Sound area. The company’s planning budget for May appears below:Puget Sound DiversPlanning BudgetFor the Month Ended May 31Budgeted diving-hours (q) ........................................... 100Revenue ($365.00q) .................................................... $36,500Expenses:Wages and salaries ($8,000 $125.00q) ............... 20,500Supplies ($3.00q) ..................................................... 300Equipment rental ($1,800 $32.00q) ..................... 5,000Insurance ($3,400) ................................................... 3,400Miscellaneous ($630 $1.80q) ............................... 810Total expense .............................................................. 30,010Net operating income .................................................. $ 6,490Required:During May, the company’s activity was actually 105 diving-hours. Prepare a flexible budget for that levelof activity.
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
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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