Auto Lavage is a Canadian company that owns and operates a large automatic carwa
ID: 2504044 • 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 companys costs:
For example, electricity costs are $1,100 per month plus $0.09 per car washed. The company expects to wash 8,200 cars in October and to collect an average of $6.50 per car washed.
Compute the company's revenue and spending variances for October. (Input all amounts as positive values. Leave no cells blank - be certain to enter "0" wherever required. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Omit the "$" sign in your response.)
Auto Lavage is a Canadian company that owns and operates a large automatic carwash facility near Quebec. The following table provides data concerning the companys costs:
Explanation / Answer
Direct materials cost variance $ $127,000 unfavorable Price variance $ (Standard price - actual price) * actual qty (4-4.10) * 1,470,000 = 147,000 unfavorable Quantity variance $ (Standard qty-actual qty) * std cost (1,470,000-1,465,000) * 4 = $20,000 favorable
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