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

Actual Revenue and spending variances Flexible Budget Revenue 50370 30 U 50400 Expenses: Cleaning supplies 6450 570 U 5880 Electricity 2176 120 U 2056 maintenance 2680 580 U 2100 Wages and salaries 7360 840 U 6520 Depreciation 8400 0 None 8400 Rent 1800 0 None 1800 Administrative expenses 2117 65 U 2052 Total expense 30983 2175 U 28808 Net operating income 19387 2205 U 21592

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