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 $0.50 $0.06 $0.15 $0.30 Cleaning supplies Electricity Maintenance Wages and salaries Depreciation Rent Administrative expenses $1,200 $4,300 $8,200 $1,900 $1,500 $0.05 For example, electricity costs are $1,200 per month plus $0.06 per car washed. The company expects to wash 8,300 cars in August and to collect an average of $5.90 per car washed. The actual operating results for August appear below. Lavage Rapide Income Statement For the Month Ended August 31 Actual cars washed 8,400 $51,070 Revenue Expenses: Cleaning sunnies 5. ARA

Answer 1

	Lavage Rapide
	Flexible Budget Performance Report
	For the Month Ended August 31
	Actual budget	Activity Variances		Flexible budget	Revenue and Spending variances		Planning budget
Cars Wahed	8400			8400			$    8,300		Workings for
										Flexible budget	Planning budget
Revenue	$ 51,070	$ 1,510	F	$ 49,560	$     590	F	$ 48,970		Revenue	(8400*5.9)	(8300*5.9)
Expenses:									Expenses:
Cleaning supplies	$   5,480	$    440	U	$    5,040	$       60	U	$    4,980		Cleaning supplies	(0.6*8400)	(0.6*8300)
Electricity	$   1,668	$      36	F	$    1,704	$         6	U	$    1,698		Electricity	1200+(0.06*8400)	1200+(0.06*8300)
Maintenance	$   1,485	$    225	U	$    1,260	$       15	U	$    1,245		Maintenance	(0.15*8400)	(0.15*8300)
Wages and Salaries	$   7,150	$    330	U	$    6,820	$       30	U	$    6,790		Wages and Salaries	4300+(0.3*8400)	4300+(0.3*8300)
Depreciation	$   8,200	$       -	None	$    8,200	$        -	None	$    8,200		Depreciation
Rent	$   2,100	$    200	U	$    1,900	$        -	None	$    1,900		Rent
Administrative expenses	$   1,815	$    105	F	$    1,920	$         5	U	$    1,915		Administrative expenses	1500+(8400*0.05)	1500+(8300*0.05)
Total Expenses	$ 27,898	$ 1,054	U	$ 26,844	$     116	U	$ 26,728
Net Operating Income	$ 23,172	$    456	F	$ 22,716	$     474	F	$ 22,242