Exercise 8-7 Flexible Budget [LO8-1] Lavage Rapide is a Canadian company that ow

Question

Exercise 8-7 Flexible Budget [LO8-1] 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 $ 1,300 Cleaning supplies Electricity Maintenance Wages and salaries Depreciation Rent Administrative expenses Cost per Car Washed $ 0.80 $ 0.06 $ 0.25 $ 0.30 $ 4,900 $ 8,100 $ 2,000 $ 1,400 $ 0.03 For example, electricity costs are $1,300 per month plus $0.06 per car washed. The company expects to wash 8,400 cars in August and to collect an average of $6.90 per car washed. Required: Complete the company's planning budget for August. Lavage Rapide Planning Budget For the Month Ended August 31 Revenue Expenses: Cleaning supplies Electricity Maintenance Wages and salaries Depreciation Rent Administrative expenses Total expense Net operating income

Explanation / Answer

Planning budget Cars washed 8400 Revenue 57960 Expenses: Cleaning supplies 6720 Electricity 1804 Maintenance 2100 Wages and salaries 7420 Depreciation 8100 Rent 2000 Administrative expenses 1652 Total expenses 29796 Net operating income 28164

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