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: points Fixed Cost per Month ebook Cost per Car Washed $e.be $0.06 se.15 $0.30 Cleaning supplies Electricity Maintenance Wages and salaries Depreciation Rent Administrative expenses $1,200 $4,700 $8,500 $1,900 $1,400 For example, electricity costs are $1.200 per month plus $0.06 per car washed. The company expects to wash 8,500 cars in August and to collect an average of $6.40 per car washed.

Answer 1

Solution

Lavage Rapide
Revenues and Spending Variance
For the Month ended August 31
Revenue	$ 1,460.00	F
Expenses:
Cleaning supplies	$ 440.00	U
Electricity	$ 36.00	F
Maintenance	$ 225.00	U
Wages and salaries	$ 330.00	U
Depreciation	$ 0.00	None
Rent	$ 200.00	U
Administrative expenses	$ 101.00	F
Total Expenses	$ 1,058.00	U
Net Operating Income	$ 402.00	F

Working

	Units (A)	Fixed cost (B)	Variable cost per unit ©	Flexible cost and revenue (D=(A x C) +B)
Revenue	8600		$       6.40	$ 55,040.00
Expenses:	8600
Cleaning supplies	8600		$       0.60	$    5,160.00
Electricity	8600	$ 1,200.00	$       0.06	$    1,716.00
Maintenance	8600		$       0.15	$    1,290.00
Wages and salaries	8600	$ 4,700.00	$       0.30	$    7,280.00
Depreciation	8600	$ 8,500.00		$    8,500.00
Rent	8600	$ 1,900.00		$    1,900.00
Administrative expenses	8600	$ 1,400.00	$       0.01	$    1,486.00
Total Expenses				$ 27,332.00
Net Operating Income				$ 27,708.00