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 $ 1,300 Cleaning supplies Electricity Maintenance Wages and salaries Depreciation Rent Administrative expenses Cost per Car Washed $ 0.60 $ 0.09 $ 0.30 $ 0.20 $ 4,500 $ 8,100 $ 1,900 $ 1,600 $ 0.84 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 $6.00 per car washed. Required: Prepare the company's planning budget for August. Lavage Rapide Planning Budget For the Month Ended August 31 Revenue Expenses: Cleaning supplies Electricity Maintenance Wages and salaries Depreciation Rent Administrative expenses Total expense Net operating income

Answer 1

	PLANNINFG BUDGET
	FOR THE MONTH OF AUGUST
	Expected Budget to wash Cars		8200 Car Washed
	Revene (8,200 car Wash X $ 6)		$                     49,200
	Expenses:
	Cleaning Supplies (8,200 X $ 060)		$                       4,920
	Electricity :
	Fixed	$               1,300
	Variable (8,200 X $ 0.09)	$                  738	$                       2,038
	Maintenance (8,200 X $ 0.30)		$                       2,460
	Wages And Salaries
	Fixed	$               4,600
	Variable (8,200 X $ 0.20)	$               1,640	$                       6,240
	Depreciation		$                       8,100
	Rent		$                       1,900
	Admnistratove Expenes
	Fixed	$               1,600
	Variable (8,200 X $ 0.04)	$                  328	$                       1,928
	Total Expenses		$                     27,586
	Net Operating income		$                     21,614