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 $ 0.07 $ 0.15 $ 0.20 Cleaning supplies Electricity Maintenance Wages and salaries Depreciation Rent Administrative expenses $ 1,400 $ 4,200 $ 8,300 $ 2,200 $ 1,700 $ 0.02 For example, electricity costs are $1,400 per month plus $0.07 per car washed. The company expects to wash 8,400 cars in August and to collect an average of $5.90 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

Answer: - Lavage Rapide planning Budget For the month Ended August 31 8400 Expected cars washed 9560 (a) Revenue (8400 x $5.90) $49560 Expenses; Cleaning supplies (8400X $ 046) $5880 Electricity ($1400 + (84cox $0.04] 1988 mountainance (8400x $0.15) wage and salaries 5880 ($4200 +(8400x$0,20) 1260 8300 Depreciation 2200 Rent- 1868 Administration Expense (1700+(8400x 40.02)) (b) Total Expense $ 27,376 Net operating income Carb) $ 22,184