Lavage Rapide is a Canadian company that owns and operates a large automatic car

Question

Lavage Rapide is a Canadian company that owns and operates a large automatic carwash facility near Montreal. The following table provides data concerning the company’s costs

For example, electricity costs are $1,200 per month plus $0.15 per car washed. The company expected to wash 9,000 cars in August and to collect an average of $4.90 per car washed.

Complete the flexible budget performance report that shows the company’s activity variances and revenue and spending variances for August. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.)

Lavage Rapide is a Canadian company that owns and operates a large automatic carwash facility near Montreal. The following table provides data concerning the company’s costs

Explanation / Answer

Lavage Rapide Income Statement For the Month Ended August 31 Particulars Budgeted Actual Variance Variance Status Type of Variance Actual cars washed 9000 8800 200 U Activity Variance Revenue $ 44100 43080 1020 U Revenue Variance Expenses - Cleaning supplies 7200 7560 -360 U - Electricity 2550 2670 -120 U - Maintenance 1800 2260 -460 U - Wages and salaries 7700 8500 -800 U - Depreciation 6000 6000 0 None - Rent 8000 8000 0 None - Administrative exp. 4900 4950 -50 U 0 None Total expenses 38150 39940 -1790 U Spending Variance 0 Net operating Income $ 5950 3140 2810 U

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