Auto Lavage is a Canadian company that owns and operates a large automatic carwa
ID: 2376502 • 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
For example, electricity costs are $1,400 per month plus $0.10 per car washed. The company expects to wash 8,000 cars in October and to collect an average of $5.90 per car washed.
The actual operating results for October appear below:
(Input all amounts as positive values. Leave no cells blank - be certain to enter "0" wherever required. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Omit the "$" sign in your response.)
Compute the company's revenue and spending variances for October.
Fixed Costper Month Cost per
Car Washed
Explanation / Answer
Activity Variance Report for October: Auto Lavage Activity Variances For the month Ended October 31 Planning Flex Activity Variance
Cars washed 8,000 8,100
Revenue 47,200 47,790 590 F
Expenses: Cleaning supplies 5,600 5,670 -70 U
Electricity 2,200 2,210 -10 U
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Maintenance 2,400 2,430 -30 U
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Wages and salaries 7,900 7,940 -40 U
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Depreciation 8,300 8,300 0 none
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Rent 2,100 2,100 0 none
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Admin Expense 2,200 2,205 -5 U
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Total expense 30,700 30,855 155 U
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Net operating income 16,500 16,935 435 F
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