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: Fixed Cost per Month Cost per Car Washed Cleaning supplies $ 0.40 Electricity $ 1,400 $ 0.07 Maintenance $ 0.10 Wages and salaries $ 4,200 $ 0.30 Depreciation $ 8,200 Rent $ 1,900 Administrative expenses $ 1,500 $ 0.04 For example, electricity costs should be $1,400 per month plus $0.07 per car washed. The company expects to wash 8,200 cars in August and to collect an average of $6.60 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: Cleaning supplies Electricity Maintenance Wages and salaries Depreciation Rent Administrative expenses Total expense Net operating income Required: 8,300 $ 56,220 3,780 1,944 1,060 7,020 8,200 2,100 1,728 25,832 $ 30,388 Calculate 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 (i.e., zero variance). Input all amounts as positive values.)
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: Fixed Cost per Month Cost per Car Washed Cleaning supplies $ 0.40 Electricity $ 1,400 $ 0.07 Maintenance $ 0.10 Wages and salaries $ 4,200 $ 0.30 Depreciation $ 8,200 Rent $ 1,900 Administrative expenses $ 1,500 $ 0.04 For example, electricity costs should be $1,400 per month plus $0.07 per car washed. The company expects to wash 8,200 cars in August and to collect an average of $6.60 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: Cleaning supplies Electricity Maintenance Wages and salaries Depreciation Rent Administrative expenses Total expense Net operating income Required: 8,300 $ 56,220 3,780 1,944 1,060 7,020 8,200 2,100 1,728 25,832 $ 30,388 Calculate 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 (i.e., zero variance). Input all amounts as positive values.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Rahul
Transcribed Image Text: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:
Fixed
Cost per
Month
Cost per
Car Washed
Cleaning supplies
$ 0.40
Electricity
$ 1,400
$ 0.07
Maintenance
$ 0.10
Wages and salaries
$ 4,200
$ 0.30
Depreciation
$ 8,200
Rent
$ 1,900
Administrative expenses
$ 1,500
$ 0.04
For example, electricity costs should be $1,400 per month plus $0.07 per car washed. The company expects to wash 8,200 cars in
August and to collect an average of $6.60 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:
Cleaning supplies
Electricity
Maintenance
Wages and salaries
Depreciation
Rent
Administrative expenses
Total expense
Net operating income
Required:
8,300
$ 56,220
3,780
1,944
1,060
7,020
8,200
2,100
1,728
25,832
$ 30,388
Calculate 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 (i.e., zero variance). Input all amounts as positive values.)
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