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 $ 1,200 Cleaning supplies Electricity Maintenance Wages and salaries Depreciation Rent Administrative expenses Cost per Car Washed $ 0.40 $ 0.09 $ 0.20 $ 0.30 $ 4,300 $ 8,100 $1,900 $1,300 $ 0.05 For example, electricity costs are $1,200 per month plus $0.09 per car washed. The company expects to wash 8,400 cars in August and to collect an average of $6.00 per car washed. Required: Prepare the company's planning budget for August.

Answer 1

Lavage Rapide Flexible Budget For the Month ended August 31 Actuval cars washed 8400 Revenue $ 50,400 Expenses Cleaning supplies $ 3,360 Electricity $ 1,956 Maintenance $ 1,680 Wages and salaries $ 6,820 Depreciation $ 8,100 Rent $ 1,900 Administrative Expenses S 1,720 Total Expenses $ 25,536 Net Operating Income S 24,864 working Notes: Revenue = 8,400*S6 = $50,400 Cleaning Supplies = 8,400*$0.40 = $3,360 Electricity = $1,200 +8.400*$0.09 = $1,200+$756 = $1,956 Maintenance = 8.400*$0.20 = $1,680 Wages and salaries = $4,300+8.400*$0.30 = $6,820 Administrative Expenses = $1,300+8,400*$0.05 = $1,720