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 costs: Cleaning supplies Electricity Maintenance Wages and salaries Depreciation Rent Administrative expenses Variable expenses: Total variable expenses Fixed expenses: Fixed Cost per Month Total fixed expenses $1,600 4,900 8,500 2,300 2,000 The company expects to charge customers an average of $6.10 per car washed. Required: Prepare a flexible budget for October assuming either 9,000 or 10,000 cars are washed. AUTO LAVAGE INC. Flexible Budget For the Month Ended October 31 Budgeted Amount Per Unit (per car) Cost per Car Washed $0.90 0.30 8.50 0.60 9,000 Cars Washed 9.87 10,000

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 costs: Cleaning supplies Electricity Maintenance Wages and salaries Depreciation Rent Administrative expenses Variable expenses: Total variable expenses Fixed expenses: Fixed Cost per Month Total fixed expenses $1,600 4,900 8,500 2,300 2,000 The company expects to charge customers an average of $6.10 per car washed. Required: Prepare a flexible budget for October assuming either 9,000 or 10,000 cars are washed. AUTO LAVAGE INC. Flexible Budget For the Month Ended October 31 Budgeted Amount Per Unit (per car) Cost per Car Washed $0.90 0.30 8.50 0.60 9,000 Cars Washed 9.87 10,000

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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Lavage Rapide owns and operates a large automatic car wash facility near Montreal. The following table provides estimates concerning the company's costs: Cleaning supplies Electricity Maintenance Rent Wages and salaries. Depreciation Administrative expenses For example, electricity costs should be $1,300 per month plus $0.08 per car washed. The company expects to wash 8,000 cars in August and to collect an average of $6.70 per car washed. The company actually washed 8,100 cars in August. Revenue Expenses: Fixed Cost per Cost per Month Car Washed $ 1,300 $4,400 $ 8,300 $2,000 $ 1,700 Lavage Rapide Activity Variances For the Month Ended August 31 Cleaning supplies Electricity Maintenance Wages and salaries Depreciation Rent $ 0.70 $ 0.08 Required: Calculate the company's activity variances for August. Note: Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.…
Espresso Express operates a number of espresso coffee stands in busy suburban malls. The fixed weekly expense of a coffee stand is $2,000 and the variable cost per cup of coffee served is $0.81. Required: 1. Fill in the following table with your estimates of the company's total cost and average cost per cup of coffee at the indicated levels of activity. 2. Does the average cost per cup of coffee served increase, decrease, or remain the same as the number of cups of coffee served in a week increases? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Fill in the following table with your estimates of the company's total cost and average cost per cup of coffee at the indicated levels of activity. Note: Round the "Average cost per cup of coffee served" to 3 decimal places. Fixed cost Variable cost Total cost Average cost per cup of coffee served 2,100 Cups of Coffee Served in a Week 2,200 2,300
Lavage Rapide is a Canadian company that owns and operates a large automatic car wash facility near Montreal. The following table provides estimates concerning the company's costs: Cleaning supplies Electricity Maintenance Wages and salaries Depreciation Rent Administrative expenses For Actual cars washed Revenue For example, electricity costs should be $1,400 per month plus $0.08 per car washed. The company expects to wash 8,300 cars in August and to collect an average of $6.00 per car washed. The actual operating results for August are as follows: Lavage Rapide Income statement the Month Ended August 31 Expenses: Cleaning supplies Electricity Maintenance Wages and salaries Depreciation Rent Administrative expenses Total expense Net operating income Fixed Cost Cost per per Month Car Washed $ 0.60 $ 1,400 $ 0.08 $ 0.25 $ 4,400 $ 0.30 $ 8,000 $ 2,200 $ 1,700 Cars washed Revenue Expenses: Cleaning supplies Electricity Maintenance 8,400 $ 51,900 Required: Prepare a flexible budget…
The following information applies to the questions displayed below.] The Fashion Shoe Company operates a chain of women’s shoe shops that carry many styles of shoes that are all sold at the same price. Sales personnel in the shops are paid a sales commission on each pair of shoes sold plus a small base salary. The following data pertains to Shop 48 and is typical of the company’s many outlets: Per Pair of Shoes Selling price $ 25.00 Variable expenses: Invoice cost $ 11.50 Sales commission 3.50 Total variable expenses $ 15.00 Annual Fixed expenses: Advertising $ 32,000 Rent 17,000 Salaries 110,000 Total fixed expenses $ 159,000 6. Refer to the original data. The company is considering eliminating sales commissions entirely in its shops and increasing fixed salaries by $35,400 annually. If this change is made, what will be Shop 48's new break-even point in unit sales and dollar sales? (Do not round intermediate calculations.)
Lavage Rapide owns and operates a large automatic car wash facility near Montreal. The following table provides estimates concerning the company's costs: Cleaning supplies Electricity Maintenance Wages and salaries Depreciation Administrative expenses Rent Actual cars washed Revenue Expenses: Cleaning supplies Electricity Maintenance For example, electricity costs should be $1,300 per month plus $0.10 per car washed. The company expects to wash 8,300 cars in August and to collect an average of $6.90 per car washed. The actual operating results for August are as follows: Lavage Rapide Income Statement For the Month Ended August 31 Wages and salaries Depreciation Rent Fixed Cost Cost per per Month Car Washed $ 0.60 $ 0.10 $ 0.25 $ 0.30 Administrative expenses Total expenses Net operating income $ 1,300 $ 4,300 $ 8,300 $ 2,200 $ 1,800 8,400 $ 59,370 5,480 2,100 $ 0.04 2,315 7,150 8,300 2,400 2,032 29,777 $ 29,593 Required: Prepare a flexible budget performance report for August. Note:…
Lavage Rapide owns and operates a large automatic car wash facility near Montreal. The following table provides estimates concerning the company's costs: Cleaning supplies. Electricity Maintenance Rent Wages and salaries. Depreciation Administrative expenses $ 0.02 For example, electricity costs should be $1,400 per month plus $0.08 per car washed. The company expects to wash 8,400 cars in August and to collect an average of $6.20 per car washed. The actual operating results for August are as follows: Lavage Rapide Income Statement For the Month Ended August 31 Actual cars washed Revenue Expenses: I Cleaning supplies. Electricity Maintenance Wages and salaries Depreciation Fixed Cost per Cost per Month Car Washed $0.60 $1,400 $ 0.08 $4,600 $ 8,300 $ 2,100 $1,500 Rent Administrative expenses Total expenses Net operating income 8,500 $ 54,100 $ 0.15 $ 0.20 5,540 2,042 1,500 6,640 8,300 2,300 1,568 27,890 $26,290 Required: Calculate the company's revenue and spending variances for August.
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Check my work Gallatin Carpet Cleaning is a small, family-owned business operating out of Bozeman, Montana. For its services, the company has always charged a flat fee per hundred square feet of carpet cleaned. The current fee is $23.60 per hundred square feet. However, there is some question about whether the company is actually making any money on jobs for some customers-particularly those located on remote ranches that require considerable travel time. The owner's daughter, home for the summer from college, has suggested investigating this question using activity-based costing. After some discussion, she designed a simple system consisting of four activity cost pools. The activity cost pools and their activity measures appear below: Activity Cost Pool Cleaning carpets Travel to jobs Job support Other (organization-sustaining costs and idle capacity costs) Activity Measure Square feet cleaned (00s) Activity for the Year 14, 500 hundred square feet Miles driven 308,000 miles Number of…
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