Che Exercise 9-10 Planning Budget [LO9-1] Lavage Rapide is a Canadian company th

ID: 2554086 • Letter: C

Question

Che Exercise 9-10 Planning Budget [LO9-1] 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 Car Washed Cost per Cleaning supplies Electricity Maintenance Wages and salaries Depreciation Rent Administrative expenses s e.70 $ 0.07 $0.20 $ 0.40 $ 1,000 $4,700 $8,400 $ 2,200 1,800 $.01 For example, electricity costs are $1,000 per month plus $0.07 per car washed. The company expects to wash 8,300 cars in August and to collect an average of $6.70 per car washed Required Prepare the company's planning budget for August Lavage Rapide Planning Budget For the Month Ended August 31 ?Prev 4 of 611: Next >

Explanation / Answer

Solution:

Revenue

55,610

Expenses:

Cleaning supplies

5810

Electricity

1581

Maintenance

1,660

Wages and salaries

8020

Depreciation

8,400

Rent

1,200

Administrative expenses

1,883

Total expense

28,554

Net operating income

27,056

Working:

Budgeted cars washed (q) = 8,300

Revenue ($6.70 * 8,300) = $55,610

Cleaning supplies ($0.70 * 8,300) = $5,810

Electricity ($1,000 + ($0.07 * 8,300)) = $1,581

Maintenance ($0.20 * 8,300) = $1,660

Wages and salaries ($4,700 + ($0.40 * 8,300)) = $8,020

Administrative expenses ($1,800 + ($0.01 * 8,300)) = $1,883