Exercise 9-13 Revenue and Spending Variances [LO9-3 Lavage Rapide is a Canadian

Question

Exercise 9-13 Revenue and Spending Variances [LO9-3 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: Fixed Cost Cost per per Month Car Washed Cleaning supplies Electricity Maintenance Wages and salaries Depreciation Rent $0.80 $0.15 $0.20 $0.30 $1, 200 $5,000 $6,000 $8,e00 Administrative expenses $4,000 $0.10 For example, electricity costs are $1,200 per month plus $0.15 per car washed. The company expects to wash 9,000 cars in August and to collect an average of $4.90 per car washed. The actual operating results for August appear below Lavage Rapide Income Statement For the Month Ended August 31

Explanation / Answer

Revenue and spending variance :

Revenue 40 U Expense Cleaning supplies 520 U Electricity 150 U Maintenance 500 U Wages and salaries 860 U Depreciation None Rent None Administrative expense 70 U Total expense 2100 U Net operating income 2140 U

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