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 car wash facility near Montreal The following table provides data concerning the company's costs Fixed Cost per Month Cleaning supplies Electricity Maintenance Wages and salaries Depreciation Rent Administrative expenses Cost per Car Washed $0.70 $0.09 $0.15 $ 0.30 $ 1,400 $ 4,100 $ 8,300 $ 2,200 1,700 $0.01 For example, electricity costs are $1,400 per month plus $0.09 per car washed. The company expects to wash 8,000 cars in August and to collect an average of $6.60 per car washed Required: Prepare the company's planning budget for August.

Explanation / Answer

Expected cars washed 8000 Revenue 52800 Expenses: Cleaning supplies 5600 =8000*0.7 Electricity 2120 =1400+(8000*0.09) Maintenance 1200 =8000*0.15 Wages and salaries 6500 =4100+(8000*0.3) Depreciation 8300 Rent 2200 Administrative expenses 1780 =1700+(8000*0.01) Total expenses 27700 Net operating income 25100

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