CoO Not secure ezton leQuestionNo 5.postS Apps D Seach Results Electnaty Wages a

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CoO Not secure ezton leQuestionNo 5.postS Apps D Seach Results Electnaty Wages and Rent $ 0 30 4.300 $8.400 $2,100 For example, electricity costs are $1,200 per month plus so. 07 per car washed. The company expects to wash 8,.300 cars in The actual operating results for August appear below August and to collect an average of $640 per car washed Actual cars washed 8,400 S 55 220 Revenue Expenses Cleaning suppies Electioty Maintenance Wages and salanies 5,480 1,751 2.730 7.150 8.400 ,300 1632 Rent Administrative expenses Total expense Net operating income S 25,777 Prepare a flexible budget performance report that shows the company's revenue and spending variances and actlivity variances for August (Indicate the effect of each variance by selecting " Required: unfavorable, and "None for no effect (i.e., zero variance), Input all amounts as positive values.) Lavage Rapide Flexible Budget Performance Report For the Month Ended August 31 Planning Flexible Actual

Explanation / Answer

Ans. Lavage Rapide Flexible budget performance Report - Sales and Operating expenses for the Year Ended August 31 Actual results Revenue and Spending Flexible budget Activity Planning budget Cars washed 8400 Variance 8400 Variance 8300 Revenue 55220 1460 F 53760 640 F 53120 Expenses: Cleaning supplies 5480 440 U 5040 60 U 4980 Electricity 1751 37 F 1788 7 U 1781 Maintenance 2730 210 U 2520 30 U 2490 Wages and salaries 7150 330 U 6820 30 U 6790 Depreciation 8400 0 8400 0 8400 Rent 2300 200 U 2100 0 2100 Administrative expenses 1632 104 F 1736 4 U 1732 Total expenses 29443 1039 U 28404 131 U 28273 Net operating income 25777 421 F 25356 509 F 24847 *Calculation of sales and variable expenses: Flexible budget Planning budget Revenue 8400*6.40 8300*6.40 Expenses: Cleaning supplies 8400*0.60 8300*0.60 Electricity 1200+(8400*0.07) 1200+(8300*0.07) Maintenance 8400*0.30 8300*0.30 Wages and salaries 4300+(8400*0.30) 4300+(8300*0.30) Depreciation 8400 8400 Rent 2100 2100 Administrative expenses 1400+(8400*0.04) 1400+(8300*0.04) *Revenue and Spending variance = Actual results - Flexible budget *Activity variance = Flexible budget - Planning budget Increase in Revenue & Net operating income from Planning to Flexible & Flexible to Actual = Favorable. Decrease in Revenue & Net operating income from Planning to Flexible & Flexible to Actual = Unfavorable. Decrease in Expenses from Planning to Flexible & Flexible to Actual = Favorable. Increase in Expenses from Planning to Flexible & Flexible to Actual = Unfavorable. *Flexible budget is prepared on the basis of Actual units.

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