Gator Divers is a company that provides divers services such as
Gator Divers is a company that provides divers services such as underwater ship repairs to clients in the Tampa Bay area. The company’s planning budget for March appears below.
Gator Divers
Planning Budget
For the Month Ended March 31
Budgeted diving-hours (q) . . . . . . . . . . . . . . . . . . . . . 200
Revenue ($380.00q) . . . . . . . . . . . . . . . . . . . . . . . . . . $76,000
Expenses:
Wages and salaries ($12,000 + $130.00q) . . . . . . 38,000
Supplies ($5.00q) . . . . . . . . . . . . . . . . . . . . . . . . . . 1,000
Equipment rental ($2,500 + $26.00q) . . . . . . . . . . 7,700
Insurance ($4,200) . . . . . . . . . . . . . . . . . . . . . . . . . 4,200
Miscellaneous ($540 + $1.50q) . . . . . . . . . . . . . . . 840
Total expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51,740
Net operating income . . . . . . . . . . . . . . . . . . . . . . . . . $24,260
Required:
During March, the company’s activity was actually 190 diving-hours. Prepare a flexible budget for that level of activity. unlikely that all costs are strictly variable. Some are likely to be fixed or mixed.
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