Question

Lavage Rapide is a Canadian company that owns and operates a large automatic carwash facility near Montreal. The following table provides data concerning the company's costs: Fixed Cost Cost per Car Washed $ 0.40 0.09 0.20 0.20 per Month Cleaning supplies Electricity Maintenance Wages and salaries Depreciation Rent Administrative expenses $1,300 $4,000 $8,200 $2,000 $1,600 0.02 For example, electricity costs are $1,300 per month plus $0.09 per car washed. The company expects to wash 8,200 cars in August and to collect an average of $6.60 per car washed. The actual operating results for August appear below. Lavage Rapide Income Statement For the Month Ended August 31 Actual cars washed Revenue 8,300 $56,220 Expenses: Cleaning supplies Electricity Maintenance Wages and salaries Depreciation Rent Administrative expenses Total expense 3,780 2,008 1,880 6,000 8,200 2,200 1,664 25,732 $30,488 Net operating income

Answer 1

		Actual	Revenue & spending		Flexible	Activity variance		planned
		Result	variance		budget			budget
cars washed		8,300			8,300			8,200
Revenue		56,220	1,440	F	54780	660	F	54120
Expenses
Cleaning supplies		3,780	460	U	3320	40	U	3280
Electricity		2,008	39	F	2047	9	U	2038
Maintenance		1,880	220	U	1660	20	U	1640
Wages and salaries		6,000	340	U	5660	20	U	5640
Depreciation		8,200	0	N	8,200	0	N	8,200
Rent		2,200	200	U	2,000	0	N	2,000
Administrative expenses		1,664	102	F	1,766	2	U	1,764
total expense		25,732	1,079	U	24,653	91	U	24,562
net operating income		30,488	361	F	30,127	569	F	29,558