EXERCISE 9-1 Prepare a Flexible Budget L09-1 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 31 100 $36,500 20,500 300 Budgeted diving-hours (0) Revenue (5365.000) Expenses Wages and salaries ($8,000 + S125.004) Supplies ($3.000) Equipment rental ($1.800 +$32.00) Insurance (53.400) Miscellaneous (5630+ $1.809) Total expense Net operating income 5,000 3.400 810 30.010 $ 6,490 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. 1.100 $198,000 105,700 EXHIBIT 9-5 Flexible Budget Based on Actual Activity Rick's Hairstyling Flexible Budget For the Month Ended March 31 Actual client-visits (9) Revenue ($180.00) Expenses: Wages and salaries (565,000+ $37.00) Hairstyling supplies ($1.509) Client gratuities ($4.109) Electricity ($1.500 + 50.104) Rent ($28.500) Liability insurance ($2,800) Employee health insurance ($21.300) Miscellaneous ($1.200 + $0.204) 1.650 4.510 1.610 28.500 2,800 21,300 1.420 Total expense 167,490 Net operating income $ 30.510