Exercise 9-14 Prepare a Flexible Budget Performance Report [LO9-4] Lavage Rapide

Question

Exercise 9-14 Prepare a Flexible Budget Performance Report [LO9-4] Lavage Rapide is a Canadian company that owns and operates a large automatic car wash facility near Montreal. The following table provides data concerning the company's costs: Cost per Car Washed $0.40 $0.06 $0.15 $0.20 Fixed Cost per Nonth cleaning supplies Electricity Naintenance Wages and salaries Depreciation Rent Administrative expenses $1,400 $4,400 $8, 200 $2,200 $1,600 $0.02 For example, electricity costs are $1,400 per month plus $o.06 per car washed. The company expects to wash 8100 cars in August and to collect an average of $6.40 per car washed. The actual operating results for August appear below.

Explanation / Answer

Flexible Budget Performance Report For the month ended August 31 actual results Revenue & spending variance F/U/N Flexible budget Activity variance F/U/N Planning Budget Formula for Flexible budget Cars washed 8200 8200 8100 Revenue 53940 1460 F 52480 640 F 51840 8200*6.40 Expenses: Cleaning supplies 3740 460 U 3280 40 U 3240 8200*0.40 electricity 1856 -36 F 1892 6 U 1886 1400+(8200*0.06) maintenance 1455 225 U 1230 15 U 1215 8200*0.15 wages and salaries 6380 340 U 6040 20 U 6020 4400+(8200*0.20) depreciation 8200 0 N 8200 0 N 8200 rent 2400 200 U 2200 0 N 2200 administration expenses 1662 102 F 1764 2 U 1762 1600+(8200*0.02) Total expenses 25693 1087 U 24606 83 U 24523 NOI 28247 373 F 27874 557 F 27317

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