Answer to Chapter 8 HW

Answer to Chapter 8 HW - BE 8.1 Puget Sound Divers Flexible...

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Unformatted text preview: BE 8.1 Puget Sound Divers Flexible Budget For the Month Ended May 31 Actual diving-hours................................................................... 105 Revenue ($365.00q)................................................................. $38,325 Expenses: Wages and salaries ($8,000 + $125.00q)............................. 21,125 Supplies ($3.00q).................................................................. 315 Equipment rental ($1,800 + $32.00q)................................... 5,160 Insurance ($3,400)................................................................ 3,400 Miscellaneous ($630 + $1.80q)............................................. 819 Total expense........................................................................... 30,819 Net operating income............................................................... $ 7,506 8-1 BE 8.2 1. The activity variances are shown below: Flight Caf Activity Variances For the Month Ended July 31 Planning Budget Flexible Budget Activity Variances Meals............................................................... 18,000 17,800 Revenue ($4.50q)............................................ $81,000 $80,100 $900 U Expenses: Raw materials ($2.40q)................................ 43,200 42,720 480 F Wages and salaries ($5,200 + $0.30q)........ 10,600 10,540 60 F Utilities ($2,400 + $0.05q)............................ 3,300 3,290 10 F Facility rent ($4,300)..................................... 4,300 4,300 Insurance ($2,300)....................................... 2,300 2,300 Miscellaneous ($680 + $0.10q).................... 2,480 2,460 20 F Total expense................................................... 66,180 65,610 570 F Net operating income....................................... $14,820 $14,490 $330 U 2. Management should be concerned that the level of activity fell below what had been planned for the month. This led to an expected decline in profits of $330. However, the individual items on the report should not receive much management attention. The unfavorable variance for revenue and the favorable variances for expenses are entirely caused by the drop in activity. 8-2 BE8.3 Quilcene Oysteria Revenue and Spending Variances For the Month Ended August 31 Flexible Budget Actual Results Revenue and Spending Variances Pounds............................................................. 8,000 8,000 Revenue ($4.00q)............................................ $32,000 $35,200 $3,200 F Expenses: Packing supplies ($0.50q)............................ 4,000 4,200 200 U Oyster bed maintenance ($3,200)................ 3,200 3,100 100 F Wages and salaries ($2,900 + $0.30q)........ 5,300 5,640 340 U Shipping ($0.80q).........................................Shipping ($0....
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This note was uploaded on 02/08/2011 for the course ACCOUNTING 275 taught by Professor Ngo during the Spring '11 term at Rutgers.

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Answer to Chapter 8 HW - BE 8.1 Puget Sound Divers Flexible...

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