Question

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 $0.70 $0.99 $ 0.25 $0.40 Cleaning supplies Electricity Maintenance Wages and salaries Depreciation Rent Administrative expenses $1,100 $4,700 $8,100 $2,200 $1,400 $0.03 For example, electricity costs are $1,100 per month plus $0.09 per car washed. The company expects to wash 8,300 cars in August and to collect an average of $6.10 per car washed. The actual operating results for August appear below. Lavage Rapide Income Statement For the Month Ended August 31 Actual cars washed 8,400 $ 52,730 Revenue Expenses: Cleaning supplies Electricity Maintenance Wages and salaries Depreciation Rent Administrative expenses Total expense Net operating income 6,310 1,817 2,315 8,380 8,100 2,400 1,549 30,871 $ 21,859 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. Do not round intermediate calculations.)

Answer 1

Lavage Rapide Revenue and spending Vaiances gust 1490 31 or the Meuth Enoled Revenue Exgenaes Cleaning Auppliep 430 39 Electaicity Maintenance । २। $ 320 tarager and dalaues Depscciation None Rent Ael ministsatine efenses 103 $1023 Total expense $467 Net operating nceme Cl

Calculatien Lanage Rapide Revenue aud dpending Vaniances for thi Manth Ended August 31 Revenue ande Actua plexible Reutts Guolger Spending Varianer Cars washed () 8,y00 8,4o0 Renenue (6.1o 9) 52,330 45, 240 1,490 f Lers Expensess Cleaning Auppies o:0 6,31lo 880 $430 U ELectsicity ,1oo +0.099) 1,81F1,856 (39) F 215 U U 0.25 9) 2,31S 2,1oo Maintenance sages and dalarie,t0otfoog) 8,380 8,060$320 U $ 8,lo0 8, 100 0None Bepreciaction (4 8,loo). (4d00) 400 2,200 200 U Reut Aedranistratine epenseri,y00tfo03) $1,5491,652 Lo3) 30,031 29,848 $1023 U $21,0 5121,392 467 F Total expenpe Net operating income 8,400 flexible Budlget 1,240 6.109 3f6.10 x 8,400 Revenue = 0.70 x 8,4o0 Cleaning suppaies 5,880

Electaiedty=1,loo t 0.09 ) 1, 100 t 0.09 x 8,400 $1,/00 t 4756 1,856 Maintenance 4 0.259 0.25 x 8,4o0 2,l00 Wages and dalaries 4,t00 t 40.yo g 4,700 + 0.40 X8,400 -4,t00 t 3, 36 o 8,060 sepheiation 42,200 Administhative expenses 8100 Rent 1,400 t to. 03 9 1,400 t D. 03 X 8,400 $1652 Actual Results -Flexible Bulget pending varianaes Revenue and 451,240 1490 6, 310-45880 4430 fs2,730 Revenue Cleaning dupplies