Lavage Rapide is a Canadian company tha provides data concerning the company\'s

Question

Lavage Rapide is a Canadian company tha provides data concerning the company's costs at owns and operates a large automatic car wash facility near Montreal. The following table Month Car ashed $1,200 Maintenance Wages and salaries Rent $0.60 $0.07 $0.25 50.30 $4,300 $8,200 2,000 1,400 $0.05 For example, electricity costs are $1,200 per month plus $007 per car washed. The company expects to wash 8,200 cars in August and to collect an average of $6.00 per car washed The actual operating results for August appear below. Lavage Rapide Actual cara washed 8,300 $$1,300- Cleaning supplies Electricity Maintenance Wagea and salaries Depreciation Rent 5,420 1,744 2,290 7,120 8,200 2,200 1710 Total expense

Explanation / Answer

Lavage Rapide Revenue and Spending variance For the Month ended August 31 Flexible Budget Actual Results Spending Variance F/U Number of car wash 8300 8300 Revenue 49800 51300 1500 (8300*6) Expenses: Cleaning supplies 4980 5420 440 U (8300*0.6) Electricity 1781 1744 -37 F (1200+(8300*0.07)) Maintenance 2075 2290 215 U (8300*0.25) Wages and Salaries 6790 7120 330 U (4300+(8300*0.3)) Depreciation 8200 8200 0 Rent 2000 2200 200 U Administrative expenses 1815 1710 -105 F (1400+(8300*0.05)) Total expenses 27641 28684 1043 U Net Operating Income 22159 22616 457 F

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