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: Cost per Fixed Cost per Month $1,200 Cleaning supplies Electricity Maintenance Wages and salaries Depreciation Rent Administrative expenses Car Washed $ 0.60 $ 0.05 $ 0.25 $0.30 $4,100 $8,200 $1,800 $1,700 $ 0.01 For example, electricity costs are $1,200 per month plus $0.05 per car washed. The company actually washed 8,300 cars in August and collected an average of $6.50 per car washed. Required: Prepare the company's flexible budget for August. Lavage Rapide Flexible Budget For the Month Ended August 31 Revenue Expenses: Cleaning supplies Electricity Maintenance Wages and salaries Depreciation Rent

Answer 1

	Flexible budget
Actual Cars washed	8300
Revenue	53950	=8300*6.50
Expenses:
Cleaning supplies	4980	=8300*0.60
Electricity	1615	=1200+(8300*0.05)
Maintenance	2075	=8300*0.25
Wages and salaries	6590	=4100+(8300*0.3)
Depreciation	8200
Rent	1800
Administrative expenses	1783	=1700+(8300*0.01)
Total expenses	27043
Net operating income	26907