Exercise 8-9 Prepare a Report Showing Revenue and Spending Variances [LO8-2] Lav

Question

Exercise 8-9 Prepare a Report Showing Revenue and Spending Variances [LO8-2]

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 $1,000 per month plus $0.08 per car washed. The company actually washed 8,300 cars in August. The company expected to collect an average of $6.00 per car washed.

  

  

Prepare a report showing the company’s revenue and spending 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.)

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

Prepare a report showing the company’s revenue and spending variances for August.

Revenue 70 U Expense Cleaning supplies 460 U Electricity 130 U Maintenance 550 U Wages and salaries 910 U Depreciation None Rent None Administrative expenses 70 U Total expenses 2120 U Net operating income 2190 U

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