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 Electricity Maintenance Wages and salaries Depreciation Rent Administrative expenses 0.60 $0.07 0.25 0.40 $1,300 $ 4,900 $8,400 $2,100 $1,700 0.02 For example, electricity costs are $1,300 per month plus $0.07 per car washed. The company expects to wash 8,500 cars in August and to collect an average of $6.20 per car washed The actual operating results for August appear below Lavage Rapide Income Statement For the Month Ended August 31 Actual cars washed Revenue 8,600 $54,800 Expenses Cleaning supplies Electricity Maintenance Wages and salaries Depreciation Rent Administrative expenses 5,600 1,865 2,365 8,660 8,400 2,300 1,770 Total expense 30,960 Net operating income $ 23,840

Explanation / Answer

Lavage Rapide Planning Budget For the month of August 31 Budgeted car washed 8500 Revenue $           52,700.00 Expenses Cleaning Supplies $             5,100.00 Electricity $             1,895.00 Maintenance $             2,125.00 Wages & salaries $             8,300.00 Depreciation $             8,400.00 Rent $             2,100.00 Administeration Expenses $             1,870.00 Total Expenses $           29,790.00 Net Operating Income $           22,910.00 Lavage Rapide Flexible Budget For the month of August 31 Actual car washed 8600 Revenue $           53,320.00 Expenses Cleaning Supplies $             5,160.00 Electricity $             1,902.00 Maintenance $             2,150.00 Wages & salaries $             8,340.00 Depreciation $             8,400.00 Rent $             2,100.00 Administeration Expenses $             1,872.00 Total Expenses $           29,924.00 Net Operating Income $           23,396.00 Flexible Budget Planning Budget Actual Budget Spending Variance Activity Variance Actual car washed 8600 8500 8600 Revenue $           53,320.00 $           52,700.00 $           54,800.00 $                1,480.00 (F) $                   620.00 (F) Expenses Cleaning Supplies $             5,160.00 $             5,100.00 $             5,600.00 $                    440.00 (U) $                      60.00 (U) Electricity $             1,902.00 $             1,895.00 $             1,865.00 $                    (37.00) (F) $                        7.00 (U) Maintenance $             2,150.00 $             2,125.00 $             2,365.00 $                    215.00 (U) $                      25.00 (U) Wages & salaries $             8,340.00 $             8,300.00 $             8,660.00 $                    320.00 (U) $                      40.00 (U) Depreciation $             8,400.00 $             8,400.00 $             8,400.00 $                             -   $                             -   Rent $             2,100.00 $             2,100.00 $             2,300.00 $                    200.00 (U) $                             -   Administeration Expenses $             1,872.00 $             1,870.00 $             1,770.00 $                  (102.00) (F) $                        2.00 (U) Total Expenses $           29,924.00 $           29,790.00 $           30,960.00 $                1,036.00 (U) $                   134.00 (U) Net Operating Income $           23,396.00 $           22,910.00 $           23,840.00 $                    444.00 (U) $                   486.00 (F)

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