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 carwash facility near Montreal. The following table provides data concerning the company's costs: Cost per Car Washed S0.80 $0.09 $0.30 $0.20 Fixed Cost per Month Cleaning supplies Electricity Maintenance Wages and salaries $1,100 $4,300 8,200 2,000 Rent Administrative expenses $1,700 $0.03 For example, electricity costs are $1,100 per month plus $0.09 per car washed. The company expected to wash 8,200 cars in August and to collect an average of $6.50 per car washed. The actual operating results for August appear below. Lavage Rapide Income Statement For the Month Ended August 31 Actual cars washed 8.300 $55.400 7,060 1,808 2,700 6,300 8,200 2.200 1,846 Cleaning supplies Wages and salaries Depreclation Rent Administrative expenses Total expense 30,114 Net operating income S 25,286 Required: Compute 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 (e., zero variance). Input all amounts as positive values.) Revenue and Spending Variances For the Month Ended 31 Revenu Wages and salaries Rent Administrative Total expense Net operating ncome

Explanation / Answer

Actual Revenue and spending variances Flexible budget Revenue 55400 1450 F 53950 Expenses: Cleaning supplies 7060 420 U 6640 Electricity 1808 39 F 1847 Maintenance 2700 210 U 2490 Wages and salaries 6300 340 U 5960 Depreciation 8200 0 None 8200 Rent 2200 200 U 2000 Administrative expenses 1846 103 F 1949 Total expenses 30114 1028 U 29086 Net operating income 25286 422 F 24864

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