Question

Lavage Rapide is a Canadian company that owns and operates a large at utomatic car wash facility near Montreal. The following table provides data concerning the company's costs: Fixed Cost per Month Cost per Car Washed $0.60 $1,000 se.es Cleaning supplies Electricity Maintenance Wages and salaries Depreciation Rent Administrative expenses $0.15 .20 $4,800 $8,200 $2,000 $1,400 $0.03 vashed. The company expects to wash 8.500 cars in August For example, electricity costs are $1,000 per month plus $0.05 per car and to collect an average of 56.20 per car washed

Answer 1

	Actual	Revenue and spending variances		Flexible budget	Activity variances		Planning budget
Cars washed	8600			8600			8500
Revenue	54800	1480	F	53320	620	F	52700
Expenses:
Cleaning supplies	5600	440	U	5160	60	U	5100
Electricity	1395	35	F	1430	5	U	1425
Maintenance	1515	225	U	1290	15	U	1275
Wages and salaries	6860	340	U	6520	20	U	6500
Depreciation	8200	0	None	8200	0	None	8200
Rent	2200	200	U	2000	0	None	2000
Administrative expenses	1555	103	F	1658	3	U	1655
Total expenses	27325	1067	U	26258	103	U	26155
Net operating income	27475	413	F	27062	517	F	26545