INTRO MGRL ACCT LL W CONNECT
8th Edition
ISBN: 9781266376771
Author: BREWER
Publisher: MCG
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Chapter 9, Problem 1E
Prepare a Flexible Budget
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:
During May, the company’s actual activity was 105 diving-hours.
Required:
Using Exhibit 9−5 as your guide, prepare a flexible budget for May.
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Puget Sound Divers provides diving services, such as underwater ship repairs, to its clients. The company's planning budget for May
appears below:
Puget Sound Divers
Planning Budget
For the Month Ended May 31
Budgeted diving-hours (q)
Revenue ($400.00g)
Expenses:
Wages and salaries ($11,100+ $124.00g)
Supplies ($4.00g)
Equipment rental ($2,300+ $24.00g)
Insurance ($3,800)
Miscellaneous ($500+ $1.48q)
Total expenses
Net operating income
During May, the company's actual activity was 240 diving-hours.
Required:
Prepare a flexible budget for May.
Note: Round your answers to the nearest whole number.
250
$ 100,000
42,100
1,000
8,300
3,800
870
56,070
$ 43,930
Prepare a Flexible Budget Performance Report
Vulcan Flyovers offers scenic overflights of Mount St. Helens, the volcano in Washington State that explosively erupted in 1982. Data concerning the company’s operations in July appear below:
The company measures its activity in terms of flights. Customers can buy individual tickets for overflights or hire an entire plane for an overflight at a discount.
Required:
1. Using Exhibit 9–8 as your guide, prepare a flexible budget performance report for July that includes revenue and spending variances and activity variances.
2. Which of the variances should be of concern to management? Explain.
Exhibit 9–8 Performance Report Combining Activity Variances with Revenue and Spending Variances
Budgeted Income Statement
Gig Harbor Boating is the wholesale distributor of a small recreational catamaran sailboat. Management has prepared the following summary data to use in its annual budgeting process:
Required:
Using Schedule 9 as your guide, prepare the company’s budgeted income statement for the year.
Chapter 9 Solutions
INTRO MGRL ACCT LL W CONNECT
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