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: Cost per Car Washed $0.60 $0.06 $0.25 $0.20 Fixed Cost per Month Cleaning supplies Electricity Maintenance Wages and salaries Depreciation Rent Administrative expenses $1,400 $4,900 $8,000 $2,100 $1,600 $0.03 For example, electricity costs are $1,400 per month plus $0.06 per car washed. The company expects to wash 8,300 cars in August and to collect an average of $6.30 per car washed The actual operating results for August appear below Lavage Rapide Income Statement For the Month Ended August 31 Actual cars washed 8,400 Revenue 54,390 Expenses: Cleaning supplies Electricity Maintenance Wages and salaries Depreciation Rent Administrative expenses 5,480 1,868 2,315 6,920 8,000 2,300 1,749 Total expense Net operating income $ 25,758 Requirec Calculate the company's revenue and spending 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.)

Explanation / Answer

Lavage Rapide Revenue and Spending Variances                       For the Month Ended August 31 Actual Flexible Revenue and Spending Variances                       Actual cars washed 8400 8400 Revenue @ $6.30 $54,390.00 $52,920.00 $1,470.00 F Expenses: Cleaning supplies $.60Q $5,480.00 $5,040.00 $440.00 U Electricity = $1400 + $.06Q $1,868.00 $1,904.00 $36.00 F Maintenance @ $.25 $2,315.00 $2,100.00 $215.00 U Wages and salaries $4900 + $0.20Q $6,920.00 $6,580.00 $340.00 U Depreciation $8,000.00 $8,000.00 $0.00 None Rent $2,300.00 $2,100.00 $200.00 U Administrative expenses = $1600 + 0.03Q $1,749.00 $1,852.00 $103.00 F Total expense $28,632.00 $27,576.00 $1,056.00 U Net operating income $25,758.00 $25,344.00 $414.00 F

Related Questions

Navigate

• Browse (All)
• Browse L
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.