? work o Lavage Rapide is a Canadian company that owns andd operates a large aut

Question

? work o Lavage Rapide is a Canadian company that owns andd operates a large automatic car wash facility near Montreal. The following table provdes data conceming the company's costs Fixed Cost Cost per Month Cleaning supplies Electricity Maintenance Wages and salaries Depreciation Rent Administrative expenses $0.80 $1,400 $0.0 $0.15 $0.40 $4, 500 58,400 $2, 100 $1,400 0.e5 anericity cot sag 0t00 mn S0the company expects to wash 8,000 cars n Augunt and to collect an average of $6.20 per car washed The actual operating results for August appear below Rapide Lavage Income Statement For the Month Ended August 31 Actual cars washed 8,100 51,700 Revenue Expenses : Cleaning supplies Electricity 6,900 1,850 1,440 8,060 8,400 2,300 Administrative expenses 1,700 0,650 21,050 . Maintenance Wages and salaries Depreciation Rent Total expense Net operating income Required: Prepare a exble budget performance repot that showes the company's revenue and spendnt vannc es ond cr mno wff August. (Indicate the effect of each variance by selecting "F for favorable, "U" for unfavorable, and variance). Inout all amounts as positive values) "None" for no effect (i.e, zero

Explanation / Answer

Actual Revenue and spending variances Flexible budget Activity variances Planning budget Cars washed 8100 8100 8000 Revenue 51700 1480 F 50220 620 F 49600 Expenses: Cleaning supplies 6900 420 U 6480 80 U 6400 Electricity 1850 36 F 1886 6 U 1880 Maintenance 1440 225 U 1215 15 U 1200 Wages and salaries 8060 320 U 7740 40 U 7700 Depreciation 8400 0 None 8400 0 None 8400 Rent 2300 200 U 2100 0 None 2100 Administrative expenses 1700 105 F 1805 5 U 1800 Total expenses 30650 1024 U 29626 146 U 29480 Net operating income 21050 456 F 20594 474 F 20120

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