Lavage Rapide is a Canadian company that owns and operates a large automatic car

Question

Lavage Rapide is a Canadian company that owns and operates a large automatic carwash facility near Montreal. The following table provides data concerning the company’s costs: Fixed Cost per Month Cost per Car Washed Cleaning supplies $ 0.60 Electricity $ 1,300 $ 0.08 Maintenance $ 0.25 Wages and salaries $ 4,600 $ 0.30 Depreciation $ 8,000 Rent $ 1,900 Administrative expenses $ 1,500 $ 0.02 For example, electricity costs are $1,300 per month plus $0.08 per car washed. The company expected to wash 8,300 cars in August and to collect an average of $6.80 per car washed. The company actually washed 8,400 cars in August. Required: Compute the company's activity variances for August. (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.)

Explanation / Answer

activity ratio = (standard hours / actual hours) * 100

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