Auto Lavage is a Canadian company that owns and operates a large automatic carwash facility near Quebec. The following tableprovides data concerning the company's expected costs:Fixed CostCost perCar Washed$0.90per MonthCleaning suppliesElectricityMaintenance$ 3,4500.300.506,60010,2004,0003,740Wages and salariesDepreciation0.60RentAdministrative expenses0.07For example, electricity costs are $3,450 per month plus $0.30 per car washed. The company expects to wash 9,900 cars in Octoberand to collect an average of $7.80 per car washed.Auto Lavage's actual level of activity was 10,000 cars. The actual revenues and expenses for October are given below:Auto LavageIncome StatementFor the Month Ended October 3110,000$79,900Actual cars washedSalesVariable expenses:Cleaning suppliesElectricity9,8503,0824,5256,250MaintenanceWages and salariesAdministrativeFixed expenses:ElectricityWages and salariesDepreciation7903,5406,60010,200Rent4,000Administrative3,645Total expenseNet operating income52,482$27,418 AUTO LAVAGE INC.Flexible Budget Performance ReportFor the Month Ended October 31Cost FormulaFlexibleFlexible BudgetActual(per car)BudgetVarianceSalesVariable Expenses:Cleaning suppliesElectricityMaintenanceWages and salariesAdministrativeTotal variable expenses0.00Contribution marginFixed expenses:ElectricityWages and salariesDepreciationRentAdministrativeTotal fixed expenses$0 $AUTO LAVAGE INC.Comprehensive Performance ReportFor the Month Ended October 31Flexible BudgetFlexibleStaticActualSales Volume VarianceVarianceBudgetBudgetNumber of cars10,00010,0009,900Variable Expenses:Total variable expensesFixed expenses:Total fixed expenses$2$

The variance is computed as difference between actual data and budgeted production data of the…

Auto Lavage is a Canadian company that owns and operates a large automatic carwash facility near Quebec. The following table provides data concerning the company's expected costs: Fixed Cost Cost per Car Washed $0.90 per Month Cleaning supplies Electricity Maintenance $ 3,450 0.30 0.50 Wages and salaries Depreciation 6,600 10,200 0.60 4,000 3,740 Rent Administrative expenses 0.07 For example, electricity costs are $3,450 per month plus $0.30 per car washed. The company expects to wash 9,900 cars in October and to collect an average of $7.80 per car washed. Auto Lavage's actual level of activity was 10,000 cars. The actual revenues and expenses for October are given below: Auto Lavage Income Statement For the Month Ended October 31 Actual cars washed Sales 10,000 $79,900

Auto Lavage is a Canadian company that owns and operates a large automatic carwash facility near Quebec. The following table provides data concerning the company's expected costs: Fixed Cost Cost per Car Washed $0.90 per Month Cleaning supplies Electricity Maintenance $ 3,450 0.30 0.50 Wages and salaries Depreciation 6,600 10,200 0.60 4,000 3,740 Rent Administrative expenses 0.07 For example, electricity costs are $3,450 per month plus $0.30 per car washed. The company expects to wash 9,900 cars in October and to collect an average of $7.80 per car washed. Auto Lavage's actual level of activity was 10,000 cars. The actual revenues and expenses for October are given below: Auto Lavage Income Statement For the Month Ended October 31 Actual cars washed Sales 10,000 $79,900

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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