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 carwash facility near Montreal. The following table provides data concerning the company's costs Cost per Car Washed S 0.70 S 0.09 S 0.25 S 0.30 Fixed Cost per Month Cleaning supplies Electricity Maintenance Wages and salaries Depreciation Rent Administrative expenses S 1,300 S 4,000 S 8,400 S 1,800 S 1,800 S 0.03 For example, electricity costs are $1,300 per month plus S0.09 per car washed. The company actually washed 8,400 cars in August. The company expected to collect an average of S6.00 per car washed. The actual operating results for August appear below. Lavage Rapide Income Statement For the Month Ended August 31 Actual cars washed Revenue 8,400 S 50,370 Cleaning supplies Electricity Maintenance Wages and salaries Depreciation Rent 6,450 2,176 2,680 7,360 8,400 1,800 2,117 Administrative expenses Total expense 30,983 Net operating income S 19,387 Required: 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.) vage Rapide Revenue and Spending Variances For the Month Ended August 31 Revenue Expenses Cleaning supplies Electricity Maintenance Wages and salaries Depreciation Rent Administrative expenses lotal expense Net operating income

Explanation / Answer

Lavage Rapide

Revenue and Spending Variances

For the month ended August 31

Actuals Revenue Variance Spending Variance Flexible Budget Activity Level 8,400 8,400 cars $ $ $ $ Revenues 50,370 30 U 50,400 Expenses Cleaning Supplies 6,450 570 U 5,880 Electricity 2,176 120 U 2,056 Maintenance 2,680 580 U 2,100 Wages and Salaries 7,360 840 U 6,520 Depreciation 8,400 None 8,400 Rent 1,800 None 1,800 Administrative Expenses 2,117 65 U 2,052 Total Expenses 30,983 30 U 2,175 U 28,808 Net Operating Income 19,387 2,205 U 21,592

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