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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 $ 0.70 Electricity $ 1,200 $ 0.08 Maintenance $ 0.25 Wages and salaries $ 4,200 $ 0.30 Depreciation $ 8,400 Rent $ 2,100 Administrative expenses $ 1,700 $ 0.03 For example, electricity costs are $1,200 per month plus $0.08 per car washed. The company expects to wash 8,400 cars in August and to collect an average of $5.90 per car washed. Required: Prepare the company’s planning budget for August.

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Answer #1

ANSWER:

Planning budget

Revenue (8400*5.9)

49560

Expense

Cleaning supplies (8400*.70)

5880

Electricity (8400*.08+1200)

1872

Maintenance (8400*.25)

2100

Wages and salaries (8400*.30+4200)

6720

Depreciation

8400

Rent

2100

Administrative salaries (8400*.03+1700)

1952

Total expense

29024

Net operating income

$20536

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