Lavage Rapide is a Canadian company that owns and operates a large automatic car wash facility near Montreal. The following table provides data concerning the company’s costs:
Fixed Cost per Month |
Cost per Car Washed |
||||||
Cleaning supplies | $ | 0.60 | |||||
Electricity | $ | 1,200 | $ | 0.07 | |||
Maintenance | $ | 0.10 | |||||
Wages and salaries | $ | 4,300 | $ | 0.20 | |||
Depreciation | $ | 8,500 | |||||
Rent | $ | 2,000 | |||||
Administrative expenses | $ | 1,500 | $ | 0.04 | |||
For example, electricity costs are $1,200 per month plus $0.07 per car washed. The company expects to wash 8,400 cars in August and to collect an average of $5.90 per car washed.
The actual operating results for August appear below.
Lavage Rapide | ||
Income Statement | ||
For the Month Ended August 31 | ||
Actual cars washed | 8,500 | |
Revenue | $ | 51,660 |
Expenses: | ||
Cleaning supplies | 5,540 | |
Electricity | 1,758 | |
Maintenance | 1,080 | |
Wages and salaries | 6,340 | |
Depreciation | 8,500 | |
Rent | 2,200 | |
Administrative expenses | 1,736 | |
Total expense | 27,154 | |
Net operating income | $ | 24,506 |
Required:
Calculate 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.)
|
Solution
Lavage Rapide | ||
Revenues and Spending Variance | ||
For the Month ended August 31 | ||
Revenue | $ 1,510.00 | F |
Expenses: | ||
Cleaning suplies | $ 440.00 | U |
Electricity | $ 37.00 | F |
Maintenance | $ 230.00 | U |
Wages and salaries | $ 340.00 | U |
Depreciation | $ 0.00 | None |
Rent | $ 200.00 | U |
Administrative expenses | $ 104.00 | F |
Total Expenses | $ 1,069.00 | U |
Net Operating Income | $ 441.00 | F |
Working
Units (A) | Fixed cost (B) | Variable cost per unit © | Flexible cost and revenue (D=(A x C) +B) | |
Revenue | 8500 | $ 5.90 | $ 50,150.00 | |
Expenses: | 8500 | |||
Cleaning suplies | 8500 | $ 0.60 | $ 5,100.00 | |
Electricity | 8500 | $ 1,200.00 | $ 0.07 | $ 1,795.00 |
Maintenance | 8500 | $ 0.10 | $ 850.00 | |
Wages and salaries | 8500 | $ 4,300.00 | $ 0.20 | $ 6,000.00 |
Depreciation | 8500 | $ 8,500.00 | $ 8,500.00 | |
Rent | 8500 | $ 2,000.00 | $ 2,000.00 | |
Administrative expenses | 8500 | $ 1,500.00 | $ 0.04 | $ 1,840.00 |
Total Expenses | $ 26,085.00 | |||
Net Operating Income | $ 24,065.00 |
Lavage Rapide is a Canadian company that owns and operates a large automatic car wash facility...
Lavage Rapide is a Canadian company that owns and operates a large automatic car wash facility near Montreal. The following table provides data concerning the company’s costs: Fixed Cost per Month Cost per Car Washed Cleaning supplies $ 0.50 Electricity $ 1,100 $ 0.07 Maintenance $ 0.15 Wages and salaries $ 4,800 $ 0.30 Depreciation $ 8,400 Rent $ 2,000 Administrative expenses $ 1,600 $ 0.04 For example, electricity costs are $1,100 per month plus $0.07 per car washed. The...
Lavage Rapide is a Canadian company that owns and operates a large automatic car wash facility near Montreal. The following table provides data concerning the company's costs: Fixed Cost per Month $1,300 cleaning supplies Electricity Maintenance Wages and salaries Depreciation Cost per Car Washed $0.70 $0.07 $0.10 $0.30 $4,100 $8,100 $1,900 $1,600 Administrative expenses $0.04 For example, electricity costs are $1,300 per month plus $0.07 per car washed. The company expects to wash 8,400 cars in August and to collect...
Lavage Rapide is a Canadian company that owns and operates a large automatic car wash facility near Montreal. The following table provides data concerning the company's costs: Fixed Cost per Month $1,500 Cleaning supplies Electricity Maintenance Wages and salaries Depreciation Rent Administrative expenses Cost per Car Washed $0.70 $0.07 $0.30 $0.30 $4,500 $8,400 $2,200 $1,800 $0.04 For example, electricity costs are $1,500 per month plus $0.07 per car washed. The company expects to wash 8,400 cars in August and to...
Lavage Rapide is a Canadian company that owns and operates a large automatic car wash facility near Montreal. The following table provides data concerning the company's costs: points Fixed Cost per Month ebook Cost per Car Washed $e.be $0.06 se.15 $0.30 Cleaning supplies Electricity Maintenance Wages and salaries Depreciation Rent Administrative expenses $1,200 $4,700 $8,500 $1,900 $1,400 For example, electricity costs are $1.200 per month plus $0.06 per car washed. The company expects to wash 8,500 cars in August and...
Lavage Rapide is a Canadian company that owns and operates a large automatic car wash facility near Montreal. The following table provides data concerning the company’s costs: Fixed Cost per Month Cost per Car Washed Cleaning supplies $ 0.50 Electricity $ 1,200 $ 0.07 Maintenance $ 0.15 Wages and salaries $ 4,700 $ 0.30 Depreciation $ 8,000 Rent $ 2,100 Administrative expenses $ 1,800 $ 0.03 For example, electricity costs are $1,200 per month plus $0.07 per car washed. The...
Lavage Rapide is a Canadian company that owns and operates a large automatic car wash facility near Montreal. The following table! provides data concerning the company's costs: Fixed Cost per Month $1,200 Cleaning supplies Electricity Maintenance Wages and salaries Depreciation Rent Administrative expenses Cost per Car Washed $0.se $0.15 $0.20 $0.30 $5,000 $6,000 $8,000 $4,000 $0.10 For example, electricity costs are $1,200 per month plus $0.15 per car washed. The company expects to wash 9,000 cars in August and to...
Lavage Rapide is a Canadian company that owns and operates a large automatic car wash facility near Montreal. The following table provides data concerning the company’s costs: Fixed Cost per Month Cost per Car Washed Cleaning supplies $ 0.70 Electricity $ 1,300 $ 0.07 Maintenance $ 0.25 Wages and salaries $ 4,900 $ 0.40 Depreciation $ 8,400 Rent $ 2,000 Administrative expenses $ 1,300 $ 0.03 For example, electricity costs are $1,300 per month plus $0.07 per car washed. The...
Lavage Rapide is a Canadian company that owns and operates a large automatic car wash facility near Montreal. The following table provides data concerning the company’s costs: Fixed Cost per Month Cost per Car Washed Cleaning supplies $ 0.50 Electricity $ 1,200 $ 0.05 Maintenance $ 0.30 Wages and salaries $ 4,500 $ 0.20 Depreciation $ 8,000 Rent $ 2,200 Administrative expenses $ 1,500 $ 0.04 For example, electricity costs are $1,200 per month plus $0.05 per car washed. The...
Lavage Rapide is a Canadian company that owns and operates a large automatic car wash facility near Montreal. The following table provides data concerning the company's costs Fixed Cost per Month Cost per Car Washed $0.50 $0. B $0.15 $0.40 Cleaning supplies Electricity Maintenance Wages and salaries Depreciation Rent Administrative expenses $1,000 $4,500 $8,200 $1,900 $1,600 $0.02 For example, electricity costs are $1,000 per month plus $0.08 per car washed. The company expects to wash 8.200 cars in August and...
Lavage Rapide is a Canadian company that owns and operates a large automatic car wash facility near Montreal. The following table provides data concerning the company's costs: Fixed Cost per Cost Car Washed per Month 0.60 0.07 Cleaning supplies Electricity $1,500 Maintenance 0.25 $4,800 $8,100 $2,000 $1,500 Wages and salaries 0.20 Depreciation Rent Administrative expenses 0.04 For example, electricity costs are $1,500 per month plus $0.07 per car washed. The company actually washed 8,500 cars in August and collected an...