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 $1,000 per month plus $0.06 per car washed. The company expects to wash 8,500 cars in August and to collect an average of $6.60 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

Adjusted Revenue & Planning Activity Flexible Spending Actual Budget Variances Budget Variances Results Budgeted car washed (q) 8500 8600 8600 Revenue ($6.6q) $56,100 $660 F $56,760 $1,440 F $58,200 Expenses: Cleaning supplies (($0.50q) $4,250 $50 U $4,300 $450 U $4,750 Electricity ($1000+0.06q) 1,510 6 U 1,516 -36 F 1,480 Maintenance ($0.20q) 1,700 20 U 1,720 220 U 1,940 Wages & salaries ($4400 + $0.30q) 6,950 30 U 6,980 330 U 7,310 Depreciation ($8400) 8,400 0 U 8,400 0 8,400 Rent ($2100) 2,100 0 U 2,100 200 U 2,300 Administratrative expense ($1700 + $0.01q) 1,785 1 U 1,786 -101 F 1,685 Total expense $26,695 $107 U $26,802 $1,063 U $27,865 Net operating income $29,405 $553 F $29,958 $377 F $30,335 $930 F

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