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Auto Lavage is a Canadian company that owns and operates a large automatic carwa

ID: 2376247 • Letter: A

Question

Auto Lavage is a Canadian company that owns and operates a large automatic carwash facility near Quebec. The following table provides data concerning the company%u2019s costs:


Fixed Cost

per Month

Cost per

Car Washed

  Cleaning supplies  

$

0.40     

  Electricity  

$

1,450        

$

0.10     

  Maintenance  

     

$

0.40     

  Wages and salaries  

$

3,700        

$

0.40     

  Depreciation  

$

6,900        

     

  Rent  

$

2,100        

     

  Administrative expenses  

$

2,000        

$

0.05     



For example, electricity costs are $1,450 per month plus $0.10 per car washed. The company expects to wash 9,500 cars in October and to collect an average of $4.90 per car washed. The company actually washed 9,620 cars in October.


The actual operating results for October appear below:


Auto Lavage

Income Statement

For the Month Ended October 31

  Actual cars washed

9,620    

  Revenue

$

48,453    



  Expenses:

      Cleaning supplies

4,228    

      Electricity

2,377    

      Maintenance

4,108    

      Wages and salaries

7,878    

      Depreciation

6,900    

      Rent

2,300    

      Administrative expenses

2,326    



  Total expense

30,117    



  Net operating income

$

18,336    







Required:

Prepare a report showing revenue and spending variances. (Input all amounts as positive values. Leave no cells blank - be certain to enter "0" wherever required. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance).)

   

Auto Lavage

Revenue and Spending Variances

For the Month Ended October 31

Flexible

Budget

Actual

Results

Revenue and

Spending Variances

  Revenue

$

$

$

  (Click to select)NoneFU




  Expenses:

    Cleaning supplies

  (Click to select)UFNone

    Electricity

  (Click to select)FNoneU

    Maintenance

  (Click to select)NoneUF

    Wages and salaries

  (Click to select)UNoneF

    Depreciation

  (Click to select)UFNone

    Rent

  (Click to select)NoneFU

    Administrative expenses

  (Click to select)FNoneU




  Total expense

  (Click to select)NoneFU




  Net operating income

$

$

$

  (Click to select)FUNone








Auto Lavage is a Canadian company that owns and operates a large automatic carwash facility near Quebec. The following table provides data concerning the company%u2019s costs:

Explanation / Answer

Flexible budget Actual results variance


Revenue 47138 48453 favourable

Expenses:

cleaning supplies 3848 4228 unfavourable

Electricity 2412 2377 favourable

maintenance 3848 4108 unfavourable

wages and supplies 7548 7878 unfavrable

Depreciation 6900 6900 0

Rent 2100 2300 unfavourble

Administrative expenses 2481 2326 favourable


Total expenses 29137 30117 unfavourable

  

Net operating income 18001 18336 favourable