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 $ 1,000 Cleaning supplies Electricity Maintenance Wages and salaries Depreciation Rent Administrative expenses Cost per Car Washed $ 0.50 $ 0.06 $ 0.20 $ 0.30 $ 4,500 $ 8,200 $ 2,100 $ 1,700 $ 0.02 For example, electricity costs are $1,000 per month plus $0.06 per car washed. The company expects to wash 8,400 cars in August and to collect an average of $6.30 per car washed.

Answer 1

Lavage Rapide Flexible Budget For the Month ended August 31 Actuval cars washed 8400 Revenue Expenses Cleaning supplies Electricity Maintenance Wages and salaries Depreciation Rent Administrative Expenses Total Expenses Net Operating Income 52,920 4,200 1,504 1,680 7,020 8,200 2,100 1,868 26,572 26,348 working Notes: Revemue 8,400*S6.30 = S52,920 Cleaning Supplies= 8,400*S0.50 = S4,200 Electricity $1,000+8.400*S0.06 $1,504 Maintenance 8.400*S0.20 S1,680 Wages and salaries $4,500+ 8.400*S0.30 $7,020 Administrative Expenses$1,700+ 8,400*S0.02 S1,868