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 Administrative expenses For example, electricity costs should be $1,400 per month plus $0.10 per car washed. The company expects to wash 8,000 cars in August and to collect an average of $6.30 per car washed. The company actually washed 8,100 cars in August. Rent Revenue Expenses: Fixed Cost Cost per per Month Car Washed $ 0.60 $ 1,400 $ 0.10 $ 0.30 $ 4,300 $ 0.30 $ 8,500 Required: Calculate the company's 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.) Cleaning supplies Electricity Maintenance Wages and salaries Depreciation Rent Administrative expenses Total expense Net operating income $ 1,800 $ 1,700 > Answer is complete but not entirely correct. Lavage Rapide Activity Variances For the Month Ended August 31 S $ 1,890 X U (3,120) X F 70 X F (1,170) F 60 X F $ 0.01 None None 490 X F 3,170 X F 5,060 X U X X x x X ✓ ✓ X x x
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 Administrative expenses For example, electricity costs should be $1,400 per month plus $0.10 per car washed. The company expects to wash 8,000 cars in August and to collect an average of $6.30 per car washed. The company actually washed 8,100 cars in August. Rent Revenue Expenses: Fixed Cost Cost per per Month Car Washed $ 0.60 $ 1,400 $ 0.10 $ 0.30 $ 4,300 $ 0.30 $ 8,500 Required: Calculate the company's 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.) Cleaning supplies Electricity Maintenance Wages and salaries Depreciation Rent Administrative expenses Total expense Net operating income $ 1,800 $ 1,700 > Answer is complete but not entirely correct. Lavage Rapide Activity Variances For the Month Ended August 31 S $ 1,890 X U (3,120) X F 70 X F (1,170) F 60 X F $ 0.01 None None 490 X F 3,170 X F 5,060 X U X X x x X ✓ ✓ X x x
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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:
Cleaning supplies
Electricity
Maintenance
Wages and salaries
Depreciation
Administrative expenses
Rent
$ 0.01
For example, electricity costs should be $1,400 per month plus $0.10 per car washed. The company expects to wash 8,000 cars in
August and to collect an average of $6.30 per car washed. The company actually washed 8,100 cars in August.
Revenue
Expenses:
Required:
Calculate the company's 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.)
Cleaning supplies
Electricity
Maintenance
Fixed Cost
Cost per
per Month Car Washed
$ 1,400
$ 4,300
$ 8,500
$ 1,800
$ 1,700
> Answer is complete but not entirely correct.
Lavage Rapide
Activity Variances
For the Month Ended August 31
Wages and salaries
Depreciation
Rent
Administrative expenses
Total expense
Net operating income
$
1,890 X U
$0.60
$0.10
$ 0.30
$ 0.30
(3,120) X F
70 X F
(1,170) F
60 X F
None
None
490 X F
3,170 X F
5,060 X U
X
X
X
X
X
✓
X
X
X
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