3 Lavage Rapide is a Canadian company that owns and operates a large automatic c

Question

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 per Month Car Washesd ost per points cleaning supplies Electricity Maintenance Wages and salarfes Depreciation Rent Administrative expenses $1,303 $4,600 $2,000 $0.50 s0.08 50.28 $0.20 eBook $1,60 0.81 Print For example, electricity costs are $1,300 per month plus $0 08 per car washed. The company expects to wash 8,400 cars in August and to collect an average of $6 50 per car washed The company actually washed 8.500 cars in August References Required: Calculate the company's activity variances for August (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values) e Rapide Activity Variances For the Month Ended August 31 Revenue Expenses Cleaning supplies Wages and salaries Depreciation Rent Administrative expenses Total expense Net operating income

Explanation / Answer

Ans. Lavage Rapide Activity Variances For the Month Ended August 31 Variance Fav./Unf. Revenue 650 F Expenses: Cleaning supplies 50 U Electricity 8 U Maintenance 20 U Wages and salaries 20 U Depreciation 0 no effect Rent 0 no effect Administrative expenses 1 U Total expenses 99 U Net operating income 551 F *Calculation of Variance Planning budget Flexible budget Activity f/u 8400 cars 8500 cars variance Revenue 54600 55250 650 F Expenses: 0 Cleaning supplies 4200 4250 50 U Electricity 1972 1980 8 U Maintenance 1680 1700 20 U Wages and salaries 6280 6300 20 U Depreciation 8000 8000 0 no effect Rent 2000 2000 0 no effect Administrative expenses 1684 1685 1 U Total expenses 25816 25915 99 U Net operating income 28784 29335 551 F *Calculation of planning & flexible budget: Planning budget Flexible budget 8400 cars 8500 cars Revenue 8400*6.50 8500*6.50 Expenses: Cleaning supplies 8400*0.50 8500*0.50 Electricity 1300+(8400*0.08) 1300+(8500*0.08) Maintenance 8400*0.20 8500*0.20 Wages and salaries 4600+(8400*0.20) 4600+(8500*0.20) Depreciation 8000 8000 Rent 2000 2000 Administrative expenses 1600+(8400*0.01) 1600+(8500*0.01) *Activity variance   =   Planning budget - flexible budget

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