6 Lavage Rapide is a Canadian company that owns and operates provides data conce

Question

6 Lavage Rapide is a Canadian company that owns and operates provides data concerning the company's costs: a large automatic car wash facility near Montreal. The following table Fixed Cost per Mont Cost per Car Washed $e.70 se.e7 $8.20 $e.20 oints Cleaning supplies Electricity Maintenance Nages and salaries Depreciation Rent Administrative expenses $1,488 $4,780 $8,808 $2,0e0 $1,7e0 References $e.84 For example, electricity costs are $1,400 per month plus $0.07 per car washed. The company expects to wash 8,100 cars in August and to collect an average of $660 per car washecd The actual operating results for August appear below. Lavage Rapide Income Statement Actual cars washed 8,280 Revenue Expenses 55, 568 Cleaning supplies Electricity Maintenance Wages and salaries 6,170 1,937 1,868 6.680

Explanation / Answer

Revenue and Spending Variance :-

Particulars Actual(A) Flexible Budget(B) Calculation for Budget Variance (A-B) Car Washed 8200 8200 Revenue (1) $55560 $54120 (8200*$6.60) 1440 F Less : Expenses :- Cleaning Supplies $6170 $5740 (8200*$0.70) $430 U Electricity $1937 $1974 ($1400+(8200*$0.07)) $37 F Maintenance $1860 $1640 (8200*$0.20) $220 U Wages and Salaries $6680 $6340 ($4700+(8200*$0.20)) $340 U Depreciation $8000 $8000 Rent $2200 $2000 $200 U Administrative Expenses $1924 $2028 ($1700+(8200*$0.04) $104 F Total Expenses (2) $28771 $27722 $1049 U Net Operating Income (1-2) $26789 $26398 $391 F

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