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

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’s costs:

For example, electricity costs are $1,300 per month plus $0.09 per car washed. The company expects to wash 8,200 cars in October and to collect an average of $5.90 per car washed.

Complete the flexible budget performance report that shows the company’s activity variances and revenue and spending variances for October. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.)

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’s costs:

Explanation / Answer

Direct mat'ls price var.
= Flexible budget costs - Actual costs
= (Actual qty x Std price) - (Actual qty x Actual price)

Direct labor rate var.
= Flexible budget costs - Actual costs
= (Actual qty x Std rate) - (Actual qty x Actual rate)

Standard Cost Actual cost Variance Favourable/unfacourable Car washed cleaning supplies                                 0.40                3,780.00                 (460.00) F 8300 Electricity                         1,300.00 Electricity                                 0.09                2,008.00                      39.00 U Maintenance                                 0.10                1,060.00                 (230.00) F Wages and salaries                         4,800.00 Wages and salaries                                 0.20                6,800.00                 (340.00) F Rent                         1,900.00                2,100.00                   200.00 U Administratve expenses                         1,600.00 Administratve expenses                                 0.01                1,582.00                   101.00 U Revenue                                 5.90             50,480.00             (1,510.00) F

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