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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 $ 0.60 Electricity $ 1,100 $ 0.10 Maintenance $ 0.20 Wages and salaries $ 4,700 $ 0.40 Depreciation $ 8,100 Rent $ 1,900 Administrative expenses $ 1,300 $ 0.04 For example, electricity costs are $1,100 per month plus $0.10 per car washed. The company expects to wash 8,200 cars in August and to collect an average of $6.70 per car washed. The actual operating results for August appear below. Lavage Rapide Income Statement For the Month Ended August 31 Actual cars washed 8,300 Revenue $ 57,040 Expenses: Cleaning supplies 5,420 Electricity 1,890 Maintenance 1,880 Wages and salaries 8,340 Depreciation 8,100 Rent 2,100 Administrative expenses 1,528 Total expense 29,258 Net operating income $ 27,782 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.)

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Answer #1
Actual Revenue and spending variances Flexible budget
Cars washed 8300 8300
Revenue 57040 1430 F 55610
Expenses:
Cleaning supplies 5420 440 U 4980
Electricity 1890 40 F 1930
Maintenance 1880 220 U 1660
Wages and salaries 8340 320 U 8020
Depreciation 8100 0 None 8100
Rent 2100 200 U 1900
Administrative expenses 1528 104 F 1632
Total expenses 29258 1036 U 28222
Net operating income 27782 394 F 27388
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