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:

For example, electricity costs are $1,200 per month plus $0.08 per car washed. The company expects to wash 8,400 cars in August and to collect an average of $6.30 per car washed.

Complete the company’s planning budget for August.

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:

Explanation / Answer

Lavage Rapide Planning Budget For the Month Ended August 31 Revenue 52920 =8400*6.3 Expenses: Cleaning supplies 6720 =8400*0.8 Electricity 1872 =1200+(8400*0.08) Maintenance 1260 =8400*0.15 Wages and salaries 7220 =4700+(8400*0.3) Depreciation 8400 Rent 1900 Administrative expenses 1684 =1600+(8400*0.01) Total expense 29056 Net operating income $23,864

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