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:

For example, electricity costs are $1,500 per month plus $0.09 per car washed. The company expects to wash 8,400 cars in August and to collect an average of $6.90 per car washed.

The actual operating results for August appear below.

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.)

Fixed Cost
per Month Cost per
Car Washed Cleaning supplies $ 0.60 Electricity $ 1,500 $ 0.09 Maintenance $ 0.25 Wages and salaries $ 4,500 $ 0.30 Depreciation $ 8,500 Rent $ 2,200 Administrative expenses $ 1,300 $ 0.02

Explanation / Answer

Actual Revenue and spending variances Flexible budget Activity variances Planning budget Cars washed 8500 8500 8400 Revenue 60060 1410 F 58650 690 F 57960 Expenses: Cleaning supplies 5540 440 U 5100 60 U 5040 Electricity 2226 39 F 2265 9 U 2256 Maintenance 2340 215 U 2125 25 U 2100 Wages and salaries 7380 330 U 7050 30 U 7020 Depreciation 8500 0 None 8500 0 None 8500 Rent 2400 200 U 2200 0 None 2200 Administrative expenses 1368 102 F 1470 2 U 1468 Total Expenses 29754 1044 U 28710 126 U 28584 Net operating income(loss) 30306 366 F 29940 564 F 29376

Related Questions

Navigate

• Browse (All)
• Browse L
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.