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 $ 0.08 $ 0.15 $ 0.40 cleaning supplies Electricity Maintenance Wages and salaries Depreciation Rent Administrative expenses $1,000 $4,300 $8,400 $1,900 $1,400 $ 0.02 For example, electricity costs are $1,000 per month plus $0.08 per car washed. The company actually washed 8,400 cars in August and collected an average of $6.30 per car washed. Required: Prepare the company's flexible budget for August.

Answer 1

Lavage Rapide Flexible Budget For the Month ended August 31 Actuval cars washed 8400 Revenue 52,920 Expenses Cleaning supplies Electricity Maintenance Wages and salaries Depreciation Rent Administrative Expenses Total Expenses Net Operating Income $ 5,880 $ 1,672 $ 1,260 $ 7,660 8.400 $ 1,900 1,568 $ 28,340 $ 24,580 working Notes Revenue 8,400*S6.30 $52,920 Cleaning Supplies 8,400*S0.70 = $5,880 Electricity $1,000+8,400*S0.08 $1,672 Maintenance 8,400*S0.15 = $1,260 Wages and salaries = $4,300 +8,400*S0.40 $7,660 Administrative Expenses -$1,400+ 8,400*S0.02 $1,568 EA