Lavage Raplide is a Canadian company that owns and operates a large automatic ca

Question

Lavage Raplide is a Canadian company that owns and operates a large automatic car wash facility near Montreal The following table prowides data concerning the company's costs Fixed Cost Cost per per Month car Washed $0.80 $0.15 $0.20 $0.30 Cleaning supplies Electricity Maintenance Wages and salaries $,000 Depreciation Rent Administrative expenses $1,200 $6,000 $8,000 $4,000 $0.10 For example, electricity costs are $1,200 per month plus $0.15 per car washed. The company expects to wash 9,000 cars in August and to collect an average ot $4.90 per car washed The actual operating results for August appear below. Lavage Rapide For the Month Ended August 31 Actual cars vashed 8,800 543 080 Expenses Cleaning supplies 7,560 2,670 2,260 Nages and salaries 8,500 6,000 8,000 Electricity Maintenance Depreciation Administrative ,950 39,940 Net operating income 140 expenscs Total expense Required: Prepare a filexible budget performance report that shows the company's revenue and spending variances and actlvity varlances for August. (Indicate the effect of each variance by selecting "F" for favorable. "U" for unfavorable, and None" for no effect .e.. zero variance). Input all amounts as positive values.) age Flexible Budget Performance R For the Month Ended August 31 Flexible Actual Planning Cars washed 8,800 $43.080 Revenue Expenses: Cleaning supplies 7,560 2,670 2260 8,500 6,000 8,000 Maintenance Rent 4,950 39,940 3,140 Total Net operating income

Explanation / Answer

Actual Revenue and spending variances Flexible budget Activity variances Planning budget Cars washed 8800 8800 9000 Revenue 43080 40 U 43120 980 U 44100 Expenses: Cleaning supplies 7560 520 U 7040 160 F 7200 Electricity 2670 150 U 2520 30 F 2550 Maintenance 2260 500 U 1760 40 F 1800 Wages and salaries 8500 860 U 7640 60 F 7700 Depreciation 6000 0 None 6000 0 None 6000 Rent 8000 0 None 8000 0 None 8000 Administrative expenses 4950 70 U 4880 20 F 4900 Total expenses 39940 2100 U 37840 310 F 38150 Net operating income 3140 2140 U 5280 670 U 5950

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