Question

Lavage Rapide is a Canadian company that owns and operates a large automatic carwash facility near Montreal. The following table provides data concerning the company’s costs:

Fixed Cost
per Month Cost per
Car Washed

  Cleaning supplies         $0.70     

  Electricity  $1,400      $0.05     

  Maintenance         $0.10     

  Wages and salaries  $4,800      $0.30     

  Depreciation  $8,300            

  Rent  $1,900            

  Administrative expenses  $1,700      $0.04     

For example, electricity costs are $1,400 per month plus $0.05 per car washed. The company expects to wash 8,400 cars in August and to collect an average of $6.30 per car washed.

Required:

Complete the company’s planning budget for August.

Answer 1

Formula 8400 * 6.30 * 18201 1400 Lavage Rapide Planning Budget For the Year Ended August Service Revenue 52920 Expenese Cleaning supplies 5880 Electricity Maintenance 840 Wages and Salaries 7320 Depreciation 8300 Rent 1900 Administrative Expense 2036 Total Expenses 28096 Operating Income 24824 8400 8400 * 8400 * 8400 * 0.70 0.05 + 0.10 0.30 + 0.00 0.00 0.04 + 4800 8300 1900 1700 8400 *