Lavage Rapide is a Canadian company that owns and operates a large automatic car
ID: 2567104 • Letter: L
Question
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: Cleaning supplies Electricity Wages and salaries Rent $ 0.40 $0.08 0.15 s 0.40 1.200 S 4,600 $ 8,400 s 2,000 $ 1,600 $0.03 For example, electricity costs are $1,200 per month plus $o.08 per car washed. The company expects to wash 8,200 cars in August and to collect an average of $6.10 per car washed The actual operaling resuts for August appear below Lavage Rapide Income Statement For the Month Ended August 31 Actual cars washed 8,300 52,120 Expenses Cleaning supplies 3,780 1,826 1,470 8,240 8,400 2.200 1,746 Wages and salaries Rent Total expense 27,662 Net operating income $ 24,458 Required Complote the fexible budget performance report that shows the company's activity variances and revenue and spending variances for August (Indicate the effect of each variance by selecting " for U" for untavorable, values.) and "None" for no effect (i.e, zero variance). Input all amounts as positive Flexible Budget Performance Report For the Month Ended August 31 Activity Expenses: Cleaning supples Electricity Maintenance Wages and salaries Depreciatiorn Rent Administrative expenses Total expense Not operating incomeExplanation / Answer
Lavage Rapide
Flexible budget performance report Abstract
For the month of August
Revenue and Spending variances
U/F
Activity variances
U/F
Number of cars washed
Revenue
1,490
F
610
F
Expenses
Cleaning Supplies
460
U
40
U
Electricity
(38)
F
8
U
Maintenance
225
U
15
U
Wages and Salaries
320
U
40
U
Depreciation
-
-
Rent
200
U
-
Administrative expenses
(103)
F
3
U
Total Expenses
1,064
U
Net Operating Income
426
F
504
F
The variances are calculated as follows:
Activity variance = difference between felxi budget and planned budget
Revenue or spending variance is the variance between Actual results and flexi budget:
Actual Results
Flexible budget
Planning budget
Number of cars washed
8,300
8,300
8,200
Revenue
52,120
50,630
50,020
Expenses
Cleaning Supplies
3,780
3,320
3,280
Electricity
1,826
1,864
1,856
Maintenance
1,470
1,245
1,230
Wages and Salaries
8,240
7,920
7,880
Depreciation
8,400
8,400
8,400
Rent
2,200
2,000
2,000
Administrative expenses
1,746
1,849
1,846
Total Expenses
27,662
26,598
26,492
Net Operating Income
24,458
24,032
23,528
Lavage Rapide
Flexible budget performance report Abstract
For the month of August
Revenue and Spending variances
U/F
Activity variances
U/F
Number of cars washed
Revenue
1,490
F
610
F
Expenses
Cleaning Supplies
460
U
40
U
Electricity
(38)
F
8
U
Maintenance
225
U
15
U
Wages and Salaries
320
U
40
U
Depreciation
-
-
Rent
200
U
-
Administrative expenses
(103)
F
3
U
Total Expenses
1,064
U
Net Operating Income
426
F
504
F
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