Auto Lavage is a Canadian company that owns and operates a large automatic carwa

Question

Auto Lavage is a Canadian company that owns and operates a large automatic carwash facility near Quebec. The following table provides data concerning the company's costs Cost per Car Washed $0.60 $0.08 $0.20 $0.30 Fixed Cost per Month Cleaning supplies Electricity Maintenance Wages and salaries Depreciation Rent Administrative expenses $1,500 $4,900 $ 8,200 $2,000 $ 1,400 $0.01 For example, electricity costs are $1,500 per month plus $0.08 per car washed. The company expects to wash 8,400 cars in October and to collect an average of $6.10 per car washed The actual operating results for October appear below: Auto Lavage Income Statement For the Month Ended October 31 Actual cars washed Revenue 8,500 $53,340 Expenses Cleaning supplies Electricity Maintenance Wages and salaries Depreciation Rent Administrative expenses 5,540 2,142 1,920 7,780 8,200 2,200 1,384 Total expense 29,166 Net operating income $24.174

Explanation / Answer

Actual Planned F/U Cars washed 8,500 8,400 Revenue(Car Washed x $6.10) $53,340.00 $51,240.00 F Expenses:       Cleaning supplies(Car Washed x $0.60) $5,540.00 $5,040.00 U       Electricity($1,500 + Car Washed x $0.08) $2,142.00 $2,172.00 U       Maintenance(Car Washed x $0.20) $1,920.00 $1,680.00 U       Wages and salaries($4,900 +Car Washed x $0.30) $7,780.00 $7,420.00 U       Depreciation $8,200.00 $8,200.00 U       Rent $2,200.00 $2,200.00 U       Administrative expenses($1,400 + Car Washed x $0.01) $1,384.00 $1,484.00 U Total expense $29,166.00 $28,196.00 U Net operating income $24,174.00 $23,044.00 F

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