Auto Lavage is a Canadian company that owns and operates a large automatic carwa
ID: 2376247 • Letter: A
Question
Auto Lavage is a Canadian company that owns and operates a large automatic carwash facility near Quebec. The following table provides data concerning the company%u2019s costs:
Fixed Cost
per Month
Cost per
Car Washed
Cleaning supplies
$
0.40
Electricity
$
1,450
$
0.10
Maintenance
$
0.40
Wages and salaries
$
3,700
$
0.40
Depreciation
$
6,900
Rent
$
2,100
Administrative expenses
$
2,000
$
0.05
For example, electricity costs are $1,450 per month plus $0.10 per car washed. The company expects to wash 9,500 cars in October and to collect an average of $4.90 per car washed. The company actually washed 9,620 cars in October.
The actual operating results for October appear below:
Auto Lavage
Income Statement
For the Month Ended October 31
Actual cars washed
9,620
Revenue
$
48,453
Expenses:
Cleaning supplies
4,228
Electricity
2,377
Maintenance
4,108
Wages and salaries
7,878
Depreciation
6,900
Rent
2,300
Administrative expenses
2,326
Total expense
30,117
Net operating income
$
18,336
Required:
Prepare a report showing revenue and spending variances. (Input all amounts as positive values. Leave no cells blank - be certain to enter "0" wherever required. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance).)
Auto Lavage
Revenue and Spending Variances
For the Month Ended October 31
Flexible
Budget
Actual
Results
Revenue and
Spending Variances
Revenue
$
$
$
(Click to select)NoneFU
Expenses:
Cleaning supplies
(Click to select)UFNone
Electricity
(Click to select)FNoneU
Maintenance
(Click to select)NoneUF
Wages and salaries
(Click to select)UNoneF
Depreciation
(Click to select)UFNone
Rent
(Click to select)NoneFU
Administrative expenses
(Click to select)FNoneU
Total expense
(Click to select)NoneFU
Net operating income
$
$
$
(Click to select)FUNone
Auto Lavage is a Canadian company that owns and operates a large automatic carwash facility near Quebec. The following table provides data concerning the company%u2019s costs:
Explanation / Answer
Flexible budget Actual results variance
Revenue 47138 48453 favourable
Expenses:
cleaning supplies 3848 4228 unfavourable
Electricity 2412 2377 favourable
maintenance 3848 4108 unfavourable
wages and supplies 7548 7878 unfavrable
Depreciation 6900 6900 0
Rent 2100 2300 unfavourble
Administrative expenses 2481 2326 favourable
Total expenses 29137 30117 unfavourable
Net operating income 18001 18336 favourable
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