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2 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 Cost per Car Washed per Month Cleaning supplies Electricity se.50 se.09 s0.10 se.30 $1,500 Maintenance Wages and salaries Depreciation Rent Adeinistrative expenses $4,200 $8,200 $2,000 $1,700 se.02 For example, electricity costs are $1,500 per month plus $0.09 per car washed. The company expects to wash 8,100 cars in August and to collect an average of $6.00 per car washed. The actual operating results for August appear below. Lavage Rapide Income Statement For the Month Ended August 31 Actual cars washed 8,200 $ 50,700 Revenue Expenses Cleaning supplies Electricity Maintenance Wages and salaries Depreciation Rent 4,550 2,199 1,0se 6,990 8,200 2,200 1,762 26,951 Administrative expenses Total expense Net operating income 23,749 Required: Calculate the company's revenue and spending variances for August. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero veariance). Input all amounts as positive values.) Actual Revenue and spending variances Flexible budget 8,200 Lavage Rapide Cars washed 8,200 Revenue and Spending Variances For the Month Ended August 31 Revenue Expenses: $ 1,371 50,700 1,371.00 49,329 Revenue Expenses Cleaning supplies Cleaning supplies 4,550 2,199 1,050 450.00 F 4,100 450 F х Electricity Maintenance Wages and salaries Depreciation Rent Administrative expenses Total expenses 39.00 2,238 U Electricity 39 230.00 F 820 F Maintenance 230 6,990 8,200 2,200 1,762 330.00 6,660 8,000 2,200 1,864 330 F Wages and salaries 200.00 F F Depreciation 200 0None Rent 102.00 Administrative expenses U 26,951 23,749 1,069.00 25,882 23,447 F 302 F Total expense 1,069 Net operating income 302.00 F Net operating income $

Answer 1

	Actual	Revenue and Spending Variances		Flexible budget
Car washed	8200			8200
Revenue	50700	(50700-49200)= 1500	F	(8200*$6)= 49200
Expenses:
Cleaning supplies	4550	(4550-4100)= 450	U	(8200*0.50)= 4100
Electricity	2199	(2199-2238)= 39	F	(8200*0.09+1500)= 2238
Maintenance	1050	(1050-820)= 230	U	(8200*0.10)= 820
Wages and salaries	6990	(6990-6660)= 330	U	(8200*0.30+4200)= 6660
Depreciation	8200	0	NONE	8200
Rent	2200	(2200-2000)= 200	U	2000
Administration expenses	1762	(1762-1864)= 102	F	(8200*0.02+1700)= 1864
Total expenses	26951	1069	U	25882
Net operating income	$23749	431	F	$23318

Lavage Rapide
Revenue and Spending Variances
For the Month Ended August 31
Revenue	$1500	F
Expenses:
Cleaning supplies	450	U
Electricity	39	F
Maintenance	230	U
Wages and salaries	330	U
Depreciation	0	NONE
Rent	200	U
Administration expenses	102	F
Total expenses	1069	U
Net operating income	$431	F