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 Cost per Car Washed Cleaning supplies $0.50 Electricity $1,000 $ 0.06 Maintenance $ 0.25 Wages and salaries $ 4,700 $ 0.30 Depreciation $ 8,200 Rent $2,000 Administrative expenses $ 1,300 $ 0.03 For example, electricity costs are $1,000 per month plus $0.06 per car washed. The company expects to wash 8, 100 cars in August and to collect an average of $6.70 per car washed. The actual operating results for August appear below. Lavage Rapide Income Statement For the Month Ended August 31 Actual cars washed 8,200 Revenue $ 56,370 Expenses: Cleaning supplies 4, 550 Electricity 1,456 Maintenance 2,265 Wages and salaries 7,490 Depreciation 8, 200 Rent 2,200 Administrative expenses 1,443 Total expense 27,604 Net operating income $ 28,766 Required: Prepare a flexible budget performance report that shows the company's revenue and spending variances and activity 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 data concerning the company's costs: Fixed Cost per Month Cost per Car Washed Cleaning supplies $0.50 Electricity $1,000 $ 0.06 Maintenance $ 0.25 Wages and salaries $ 4,700 $ 0.30 Depreciation $ 8,200 Rent $2,000 Administrative expenses $ 1,300 $ 0.03 For example, electricity costs are $1,000 per month plus $0.06 per car washed. The company expects to wash 8, 100 cars in August and to collect an average of $6.70 per car washed. The actual operating results for August appear below. Lavage Rapide Income Statement For the Month Ended August 31 Actual cars washed 8,200 Revenue $ 56,370 Expenses: Cleaning supplies 4, 550 Electricity 1,456 Maintenance 2,265 Wages and salaries 7,490 Depreciation 8, 200 Rent 2,200 Administrative expenses 1,443 Total expense 27,604 Net operating income $ 28,766 Required: Prepare a flexible budget performance report that shows the company's revenue and spending variances and activity 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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![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 Cost per Car Washed Cleaning
supplies $0.50 Electricity $1,000 $ 0.06 Maintenance $ 0.25 Wages and salaries $ 4,700 $ 0.30 Depreciation $ 8,200
Rent $2,000 Administrative expenses $ 1,300 $ 0.03 For example, electricity costs are $1,000 per month plus $0.06 per
car washed. The company expects to wash 8, 100 cars in August and to collect an average of $6.70 per car washed. The
actual operating results for August appear below. Lavage Rapide Income Statement For the Month Ended August 31
Actual cars washed 8,200 Revenue $ 56,370 Expenses: Cleaning supplies 4, 550 Electricity 1,456 Maintenance 2,265
Wages and salaries 7,490 Depreciation 8, 200 Rent 2,200 Administrative expenses 1,443 Total expense 27, 604 Net
operating income $ 28, 766 Required: Prepare a flexible budget performance report that shows the company's revenue
and spending variances and activity 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.)](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fa4b67b23-fa8c-4124-a4d2-b31d9a9580a5%2F15cd7a8b-af73-4b44-a881-a92b59fd9dbe%2F639d2mb_processed.jpeg&w=3840&q=75)
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 data concerning the company's costs: Fixed Cost per Month Cost per Car Washed Cleaning
supplies $0.50 Electricity $1,000 $ 0.06 Maintenance $ 0.25 Wages and salaries $ 4,700 $ 0.30 Depreciation $ 8,200
Rent $2,000 Administrative expenses $ 1,300 $ 0.03 For example, electricity costs are $1,000 per month plus $0.06 per
car washed. The company expects to wash 8, 100 cars in August and to collect an average of $6.70 per car washed. The
actual operating results for August appear below. Lavage Rapide Income Statement For the Month Ended August 31
Actual cars washed 8,200 Revenue $ 56,370 Expenses: Cleaning supplies 4, 550 Electricity 1,456 Maintenance 2,265
Wages and salaries 7,490 Depreciation 8, 200 Rent 2,200 Administrative expenses 1,443 Total expense 27, 604 Net
operating income $ 28, 766 Required: Prepare a flexible budget performance report that shows the company's revenue
and spending variances and activity 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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