Car Washed $0.50 $0.06 $0.30 $0.30 per Honth Cleaning supplies Electricity Maint

Question

Car Washed $0.50 $0.06 $0.30 $0.30 per Honth Cleaning supplies Electricity Maintenance Wages and salaries Depreciation Rent Administrative expenses $1,200 $4,300 $8,300 $ 2,100 $1,500 $0.02 For example, electricity costs are $1,200 per month plus $0.06 per car washed. The company expects to wash 8,100 cars in August and to collect an average of $6.60 per car washed The actual operating results for August appear below Lavage Rapide Income Statement For the Month Ended August 31 Actual cars washed 8,200 Revenue $55,560 Expenses: Cleaning supplies Electricity Maintenance Wages and salaries Depreciation Rent Administrative expenses 4,550 1,656 2,670 7,090 8,300 2,300 1,562 28,128 $ 27,432 Total expense Net operating income Required Prepare a flexible budget performance report that shows the company's revenue and spending variances and activity variances for

Explanation / Answer

Actual Revenue and spending variances Flexible budget Activity variances Planning budget Cars washed 8200 8200 8100 Revenue 55560 1440 F 54120 660 F 53460 Expenses: Cleaning supplies 4550 450 U 4100 50 U 4050 Electricity 1656 36 F 1692 6 U 1686 Maintenance 2670 210 U 2460 30 U 2430 Wages and salaries 7090 330 U 6760 30 U 6730 Depreciation 8300 0 None 8300 0 None 8300 Rent 2300 200 U 2100 0 None 2100 Administrative expenses 1562 102 F 1664 2 U 1662 Total expenses 28128 1052 U 27076 118 U 26958 Net operating income 27432 388 F 27044 542 F 26502

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