Auto Lavage is a Canadian company that owns and operates a large automatic carwa
ID: 2538848 • Letter: A
Question
Auto Lavage is a Canadian company that owns and operates a large automatic carwash facility near Quebec. The following table provides data concerning the company's expected costs Cost per Car Washed $0.60 $0.10 $0.30 $ 0.40 Fixed Cost per Month Cleaning supplies Electricity Maintenance Wages and salaries Depreciation Rent Administrative expenses $1,720 $5,000 $8,600 $ 2,400 $ 2,130 0.08 For example, electricity costs are $1,720 per month plus S0.10 per car washed. The company expects to wash 8,300 cars in October and to collect an average of $6.20 per car washed Auto Lavage's actual level of activity was 8,400 cars. The actual revenues and expenses for October are given below:Explanation / Answer
1. Flexible Budget performace report is as prepared below:
2.
Comprehensive Performace Budget Report is as prepared below:
Auto Lavage Flexible Budget Performance Report For the Month Ended October 31 Cost Formula (per car) Actual Flexible Budget Flexible Budget Variance Actual Car Wash (a) 8,400 8,400 Sales 6.2 55,600 52,080 -3,520 U less: variable Expenses Cleaning Supplies 0.60 5,250 5,040 -210 U Electricity 0.10 890 840 -50 U Maintenance 0.30 2,290 2,520 230 F Wages and salaries 0.40 3,702 3,360 -342 U Administrative expenses 0.08 756 672 -84 U Total variable expenses 12,888 12,432 -456 U Less: fixed expenses: Electricity 1,780 1,720 -60 U Wages and salaries 5,000 5,000 0 None Depreciation 8,600 8,600 0 None Rent 2,400 2,400 0 None Administrative expenses 2,045 2,130 85 F Total fixed expenses 19,825 19,850 25 F Total expenses 32,713 32,282 -431 U Net operating income 22,887 19,798 -3,089 URelated Questions
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