Auto Lavage is a Canadian company that owns and operates a large automatic carwa
ID: 2478922 • 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's costs Cost per Car Washed 0.70 $0.10 0.30 $0.40 Fixed Cost per Month Cleaning supplies Electricity Maintenance Wages and salaries Depreciation Rent Administrative expenses $1,400 $4,700 $8,300 $2,100 $1,800 $0.05 For example, electricity costs are $1,400 per month plus $0.10 per car washed. The company expects to wash 8,000 cars in October and to collect an average of $5.90 per car washed The actual operating results for October appear below: Auto Lavage Income Statement For the Month Ended October 31 Actual cars washed Revenue 8,100 $ 49,300 Expenses: Cleaning supplies Electricity Maintenance Wages and salaries Depreciation Rent Administrative expenses 6,100 2,170 2,640 8,260 8,300 2,300 2,100 Total expense 31,870 Net operating income $17,430Explanation / Answer
Auto Lavage Flexible Budget Performance Report For the Month Ended Oct 31 Car Washes 8100 8100 8000 Actual Results Revenue & Spending Variances Flexible Budget Activity Variances Planning Budget Revenue - 49,300 1,510 F 47,790 590 F 47,200 Expenses: Cleaning supplies 6,100 430 U 5,670 70 U 5,600 Electricity 2,170 40 F 2,210 10 U 2,200 Maintenance 2,640 210 U 2,430 30 U 2,400 Wages & Salaries 8,260 320 U 7,940 40 U 7,900 Depreciation 8,300 - 8,300 - 8,300 Rent 2,300 200 U 2,100 - 2,100 Administrative exp. 2,100 105 F 2,205 5 U 2,200 Total Expenses 31,870 1,015 U 30,855 155 U 30,700 Net Operating Income 17,430 495 F 16,935 435 F 16,500
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