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 $1,400 per month plus $0.08 per car washed. The company expects to wash 8,200 cars in August and to collect an average of $6.10 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

Answer:

LAVAGE RAPIDE Activity Variances For the month ended August 30 Planning Budget Flexible Budget Activity variances F/U No. of car wash 8200 8300 Revenue ($6.10 per car washed) 50020 50630 610 F Expense: 0 Cleaning supplies (0.50*No. of cars washed) 4100 4150 50 U Electricity (1400+.08*no. of cars washed) 2056 2064 8 U Maintenance (0.15* no. of cars washed) 1230 1245 15 U Wages and salaries (4200+0.30*no. of cars washed) 6660 6690 30 U Depreciation 8000 8000 0 None Rent 2000 2000 0 None Administrative expenses (1400+0.03* no. of cars washed) 1646 1649 3 U Total expense 25692 25798 106 U

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