Reference no: EM13845172

Question 1:

Gator Divers is a company that provides diving 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)	300
Revenue ($460.00q)	$ 138.000
Expenses:
Wages and salaries ($11.900 + $122.00g)	48.500
Supplies ($6.00q)	1.800
Equipment rental ($2.000 + $23.00q)	8.900
Insurance ($3,900)	3.900
Miscellaneous ($500 + $1.48q)	944
Total expense	64.044
Net operating income	$ 73,956

Required:

During March. the company's activity was actually 290 diving-hours. Complete the flexible budget for that level of activity.

Question 2:

AirMeals, Inc prepares in-flight meals for a number of major airlines. One of the company's products is stuffed cannelloni with roasted pepper sauce. fresh baby com. and spring salad. During the most recent week, the company prepared 7,000 of these meals using 2.700 direct labor-hours. The company paid these direct labor workers a total of $27,000 for this work or $10.00 per hour.

According to the standard cost card for this meal. it should require 0.40 direct labor-hours at a cost of $9.30 per hour.

Required:

According to the standards, what direct labor cost should have been incurred to prepare 7.000 meals? How much does this differ from the actual direct labor cost?

Question 3:

Midlands Design Ltd. of Manchester, England, is a company specializing in providing design services to residential developers. Last year the company had net operating income of £470,000 on sales of £1,400,000.

The company's average operating assets for the year were £1,600,000 and its minimum required rate of return was 15%. (The currency in the United Kingdom is the pound, denoted by £.)

Required:

Compute the company's residual income for the year