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

Question

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 Cleaning supplies Electricity Maintenance Wages and salaries Depreciation Rent Administrative expenses Cost pen Car Washed $0.70 $0.10 $0.15 $0.30 $1,000 $4,180 $8,100 $1,900 $1,700 $0.02 For example, electricity costs are $1,000 per month plus $0.10 per car washed. The company expects to wash 8,100 cars in August and to collect an average of $6.40 per car washed The actual operating results for August appear below Lavage Rapide Income Statement For the Month Ended August 31 Actual cars washed 8, 200 Revenue $ 53,940 Expenses Cleaning supplies Electricity Maintenance Wages and salaries Depreciation Rent Administrative expense:s 6,170 1,780 1,455 6,890 8,100 2,100 1,762 Total expense Net operating income $ 25,683 Required Prepare a flexible budget performance report that shows the company's revenue and spending variances and 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.)

Explanation / Answer

Particulars Cost formula Actual Revenue and spending variance Flexible budget Activity variance Static budget Car washed 8200 8200 8100 Revenue 53940 1460 F 52480 640 F 51840 Expense Cleaning supplies .7q 6170 430 U 5740 70 U 5670 Electricity 1000+.1q 1780 40 F 1820 10 U 1810 Maintenance .15q 1455 225 U 1230 15 U 1215 Wages and salaries 4100+.30q 6890 330 U 6560 30 U 6530 Depreciation 8100 8100 0 8100 0 8100 Rent 1900 2100 200 U 1900 0 1900 Administrative expense 1700+.02q 1762 102 F 1864 2 U 1862 Total expense 28257 1043 F 27214 127 U 27087 Net operating income 25683 417 F 25266 513 F 24753

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