Exercise 9-11 Flexible Budget [LO9-1] Lavage Rapide is a Canadian company that o

Question

Exercise 9-11 Flexible Budget [LO9-1] Lavage Rapide is a Canadian company that owns and operates a large automatic car wash facility near Montreal. The following table provides data concerning the company's costs Fixed Cost per Month Cost per Car Washed Cleaning supplies Electricity Maintenance Wages and salaries Depreciation Rent Administrative expenses $0.40 $0.05 $ 0.20 s 0.20 $1,400 $4,700 $8,300 $2,200 $1,300 0.04 For example, electricity costs are $1,400 per month plus $0.05 per car washed. The company actually washed 8,600 cars in August and collected an average of $6.40 per car washed Required: Prepare the company's flexible budget for August.

Explanation / Answer

Flexible budget :

Revenue (8600*6.4) 55040 Expense Cleaning supplies (8600*.40) 3440 Electricity (8600*.05+1400) 1830 Maintenance (8600*.20) 1720 Wages and salaries (8600*.20+4700) 6420 Depreciation 8300 Rent 2200 Administrative expenses (8600*.04+1300) 1644 Total expense 25554 Net operating income 29486

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