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: xed cost Faxed cost per Month Cost Car Washed $1,100 Cleaning supplies Electricity Maintenance Wages and salaries Depreciation Rent Administrative expenses $4,000 200 $ 2.100 1.500 For example, electricity costs are $1,100 per month plus $0.09 per car washed. The company expects to wash 8,200 cars in August and to collect an average of $6.10 per car washed.

Answer 1

Ans.	LAVAGE RAPIDE
	Planning Budget
	For the Month Ended August 31
		Planning Budget
	Cars	8,200
	Revenue	$50,020
	Expenses:
	Cleaning supplies	$6,560
	Electricity	$1,838
	Maintenance	$820
	Wages and salaries	$7,280
	Depreciation	$8,200
	Rent	$2,100
	Administrative expenses	$1,582
	Total expenses	$28,380
	Net operating income	$21,640
	*Calculations for Planning budget:
		Planning Budget
	Cars	8,200
	Revenue	$6.10 * 8,200
	Expenses:
	Cleaning supplies	$0.80 * 8,200
	Electricity	$1,100 + ($0.09 * 8,200)
	Maintenance	$0.10 * 8,200
	Wages and salaries	$4,000 + ($0.40 * 8,200)
	Depreciation	$8,200
	Rent	$2,100
	Administrative expenses	$1,500 + ($0.01 * 8,200)
	*Planning budget is prepared on the basis of expected units (cars).