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 car wash facility near Montreal. The following table provides data concerning the company's costs Fixed Cost per Month Cleaning supplies Electricity Maintenance Wages and salaries Depreciation Rent Administrative expenses Cost per Car Washed $0.40 $0.09 $0.10 $0.20 $1,300 $4,800 $8,400 $2,100 $1,700 $0.01 For example, electricity costs are $1,300 per month plus $0.09 per car washed. The company expects to wash 8,100 cars in August and to collect an average of $6.50 per car washed. The company actually washed 8,200 cars in August. Required Calculate the company's activity 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 Activity Variances For the Month Ended August 31

Explanation / Answer

Activity variance :

Revenue 650 F expense Cleaning supplies 40 U Electricity 9 U maintenance 10 U Wages and salaries 20 U Depreciation None Rent None Administrative expense 1 U Total expense 80 U Net operating income 570 F

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