Exercise 9-11 Flexible Budget [LO9-1) Lavage Rapide is a Canadian co provides da

Question

Exercise 9-11 Flexible Budget [LO9-1) Lavage Rapide is a Canadian co provides data concerning the company's costs: mpany that owns and operates a large automatic car wash facility near Montreal. The following table Fixed Cost per Month Cost per Car Washed Cleaning supplies Electricity Maintenance Wages and salaries Depreciation Rent Adninistrative expenses $0.50 $0.09 $0.25 $0.30 $1,200 $4,000 $8,300 $1,900 $1,400 $ 0.01 For example, electricity costs are $1200 per month plus $0.09 per car washed. The company actually washed 8,400 cars in August and collected an average of $5.90 per car washed. Required Prepare the company's flexible budget for August

Explanation / Answer

Lavage Rapide

Flexible Budget

For the Month Ended August 31

Cars washed 8,400 Revenue (8,400*5.9) 49,560 Expenses : Cleaning supplies (8,400*0.5) 4,200 Electricity [1,200+(8,400*0.09)] 1,956 Maintainance (8,400*0.25) 2,100 Wages and salries [4,000+(8,400*0.3)] 6,520 Depreciation 8,300 Rent 1,900 Administrative expenses [1,400+(8,400*0.01)] 1,484 Total expense 26,460 Net operating income 23,100

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