Lavage Rapide s a Canadian company that owns and operates a large automatic car
ID: 2555399 • Letter: L
Question
Lavage Rapide s a Canadian company that owns and operates a large automatic car wash facilty near Montreat The following tabe provides data concerning the company's costs Fixed Cost Cost Month Cleaning supplies Electricity Maintenance $e.60 $0.06 $0.15 $0.30 $1,000 Wages and salaries Depreciation Rent Administrative expenses $4,700 58,300 $2,000 $1,500 $e.81 washed The company expects to wash 8,200 cars in August For example, electricity costs are $1,000 per month plus $006 per car and to collect an average of $6 90 per car washed The actual operating results for August appear below Lavage Rapide Income Statement For the Month Ended August 31 Actual cars washed 8,388 58,688 Revenue Expenses: S,428 1,462 1,478 7,528 8, 300 2,288 Cleaning supplies Electricity . Maintenance Wages and salaries Depreciation Rent Total expense Net operating income Administrative expenses 1,482 27,854 $30,826 Required: Calculate the company's revenue and spending vaniances for August. (Indicate the effect of each variance by selecting F" for favorable, "U" for unfavorable, and "None" for no effect (ie, zero variance). Input all amounts as positive values) ??Explanation / Answer
Actual Revenue and spending variances Flexible budget Cars washed 8300 8300 Revenue 58680 1410 F 57270 Expenses: Cleaning supplies 5420 440 U 4980 Electricity 1462 36 F 1498 Maintenance 1470 225 U 1245 Wages and salaries 7520 330 U 7190 Depreciation 8300 0 None 8300 Rent 2200 200 U 2000 Administrative expenses 1482 101 F 1583 Total expenses 27854 1058 U 26796 Net operating income 30826 352 F 30474
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