Question

Exercise 9-13 Revenue and Spending Variances (LO9-3] 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 $1,300 Cleaning supplies Electricity Maintenance Wages and salaries Depreciation Rent Administrative expenses Cost per Car Washed $0.70 $0.09 $0.20 $0.30 $4,900 $ 8,100 $2,000 $1,500 $0.04 For example, electricity costs are $1,300 per month plus $0.09 per car washed. The company expects to wash 8,200 cars in August and to collect an average of $6.50 per car washed. The actual operating results for August appear below.

Answer 1

Answer-

LAVAGE RAPIDE
Revenue & Spending Variances
FOR THE MONTH ENDED AUGUST 31
PARTICULARS	REVENUE & SPENDING VARIANCE	REMARK
	$
Revenue	1450	Favorable
Less:-Expenses
Cleaning expenses	-430	Unfavorable
Electricity	39	Favorable
Maintenance	-220	Unfavorable
Wages & salaries	-330	Unfavorable
Depreciation	0	None
Rent	-200	Unfavorable
Administrative expenses	104	Favorable
Total Expenses	-1037	Unfavorable
Income from operations	413	Favorable

Explanation-

Lavage Rapide
Revenue & Spending Variances
For the month ended August 31
Particulars		Flexible Budget	Actual Results	Variances	Remark
		$	$	$
Revenue	8300 car washed*$6.50 per car washed	53950	55400	1450	Favorable
Less:-Expenses
Cleaning expenses	8300 car washed*$0.70 per car washed	5810	6240	-430	Unfavorable
Electricity	(8300 car washed*$0.09 per car washed)+$1300	2047	2008	39	Favorable
Maintenance	8300 car washed*$0.20 per car washed	1660	1880	-220	Unfavorable
Wages & salaries	(8300 car washed*$0.30 per car washed)+$4900	7390	7720	-330	Unfavorable
Depreciation		8100	8100	0	None
Rent		2000	2200	-200	Unfavorable
Administrative expenses	(8300 car washed*$0.04 per car washed)+$1500	1832	1728	104	Favorable
Total expenses		28839	29876	-1037	Unfavorable
Income from operations		25111	25524	413	Favorable