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EXERCISE 9-1 Prepare a Flexible Budget [L091]
HM Guided Example 9-1
Pugel Sound Divers is @ company thal provides diving services such as
Underwater ship repairs to clients in the Puget Sound area. The company's
planning budget for May appesrs below:
Puget Sound Divers
Planning Budget
For the Month Encled May 31
Budgeted diving-hours (q)......[Link] 100
Revenue ($305.004) ...
Expenses:
Wages and salaries ($8,000 + $125.00) 20,500
‘Supplies (63.009) . . '300
Equipment rental ($1,800 + $32.00q) .............. 5,000
Insurance ($3,400) . 3,400
Miscellaneous ($630 + $1.80q) . 810
Total expense .
Net operating income
Required:
During May, the company's activity was actually 105 diving-hours. Prepare
«a flexible budget for that level of activity. EXERCISE 9-2 Prepare. Report showing Activity Varances(LO2-2),
Wl cussed Samp 02
Flight Ct is coms tet prepares insight meal fo sirinas nits
chen lected neti the esl sirprt. The company's planning budget or
uy sopesrs elon:
Fight Coe
Planing Bucgst
For the Month Ered Jy 31
Budgeted meds () 18.000
Revenue (4.509). $81,000
aw marine (2.09) s200
Wages end slries( $5200 + $0209) 10,500
Uslites 2400+ $0.05q) 3.300
See 4.300
Insurance ($2,
Nisatancos tei ‘$401 ae
Toul expense
Netopia necme « Sis2o
tn duly, 17,000 moat were actully served. The company’s Rexble budget
orth lal ef actity appears Bala:
Figit Cato
ead Buget
Fr the Month Ended ly 1
Burlgeted mens)
Revenue (4.59)
Expense:
aw materials (62.409)
Wage and in 00+
ibs 62,400 £0.054)
Failty rot ($4300),
lesuranc (2.200).
calla (0003
Tol expence
Net operating income
Required
4. Prepare report showing the compan/s scivty variances for Ju
2. Vtich ofthe actity varices should be of concer to mensgerent?
Esplin EXERCISE 8-3 Prepare a Report showing Revenue ané Spending Variances
os
Ml cuited rami 02
(ile Oysters fams anc ses oystes inthe PsiicNothwest. The
company nervesea and sol 8,000 pounds of oysters m August. The
companys fbi budge fr August appear blow:
Duiloene Oreteria
Flexible Budget
Forthe Month Ended August 91
‘Acual pout @)
Rovere (4.09)
Expenson:
Packing supplies ($0509)...
Oyster bed maintenance (3.360)
“The scuel ests fr August appear below:
ulcers Oysteia
Ineame Statarant
Forthe Month Ended August st
‘Actual pounds
Revers
Packing supplies
Prepare «report shoning the company's revenue snd spering vrarces [EXERCISE $4 Prepare a Flexible Budget Performance Report [108-4],
Hl Gutedexampe 04
‘Vuln Fyovers offers scenic overfight of Mount St Helens, the vleano
inWeshngten Sistethat explosively erupted in 1082. Dats conceming the
cimeanys operons in July appear Elon:
‘Wear vers
Oneonta
or mean Ea ay 21
fom rice rareng
Feasts Broo Gust
ite a 2 0
omnve $20.08) CT siseso $8360 S160
Vino alan ($4.00 + 20) uso 79m a0
Ft .009) Pr fo hs
‘ior iw 6+ 23500 2k 20
‘reat erection $70 ne)
Ocoee $10 + S260 so 2s _Bo
Nat epantng mee ase
“The company messuesits activity in terms of fights. Customers can buy
invidual kets for overights ochre an ene plane fren overfight at
seoaunt,
Required
1. Proparaa fee budget parfommancerepet for ly
2. Whi of ie vances shoud be of cnosm to management? Expl. EXERCISE £6 Critque a Variance Repost [LOS-5)
‘he Teminstor ne. prowdes onsite resent pes exermansnon
rum of jobs to meacire coy. tthe bagirning of er, tha sempary
bated for 10 jks. bat he stu! nuniberofjobs tunes outto be 106.
‘Aregort sorparina he budgeted revenues and coss tothe actual
reverues and costs appeers below:
Tixiance Rego |
Forth Month Erde Agi 20
‘Actual Planing
fesits Buiget_arences
a
eres SICUIIIIID gaog20 919500 gua2o ¢
Expornoe:
Mebleteemopertrgecests..... 1020 10000 ZOU
Extorinting Sipe 00 310 F
Abvettebg eceesrsccccccns 800 °
Dispatch cosis 2340 MoU
Oftes rest ¥00 °
Tou emeree Gies20 Tier00 | a0
Net operat Income S220 m0 Himor
a
Requires
Ise above varancereportusel x evaluating ew wel evenues a
coals wer coiled ding Api? Why, or why nat?