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 Rent Actual cars washed Revenue Expenses: Wages and salaries. Depreciation Administrative expenses $ 0.02 For example, electricity costs should be $1,400 per month plus $0.07 per car washed. The company expects to wash 8,500 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 For the Month Ended August 31 Cleaning supplies Electricity Maintenance Wages and salaries Depreciation Fixed Cost per Month Rent $ 1,400 $ 4,200 $ 8,300 $ 1,900 $1,400 Administrative expenses Total expense Net operating income cost per Car Washed 8,600 $ 53,100 $ 0.40 $ 0.07 $ 0.20 $ 0.30 3,900 1,965 1,940 7,110 8,300 2,100 1,470 26,785 $ 26,315 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 variancal Innut all amounte se nacitiva valune 1
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 Rent Actual cars washed Revenue Expenses: Wages and salaries. Depreciation Administrative expenses $ 0.02 For example, electricity costs should be $1,400 per month plus $0.07 per car washed. The company expects to wash 8,500 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 For the Month Ended August 31 Cleaning supplies Electricity Maintenance Wages and salaries Depreciation Fixed Cost per Month Rent $ 1,400 $ 4,200 $ 8,300 $ 1,900 $1,400 Administrative expenses Total expense Net operating income cost per Car Washed 8,600 $ 53,100 $ 0.40 $ 0.07 $ 0.20 $ 0.30 3,900 1,965 1,940 7,110 8,300 2,100 1,470 26,785 $ 26,315 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 variancal Innut all amounte se nacitiva valune 1
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
Actual cars washed.
Revenue
Expenses:
Lavage Rapide
Income Statement
For the Month Ended August 31
Cleaning supplies
Electricity
Maintenance
For example, electricity costs should be $1,400 per month plus $0.07 per car washed. The company expects to wash 8,500 cars in
August and to collect an average of $6.00 per car washed.
The actual operating results for August are as follows:
Wages and salaries.
Depreciation
Rent
Fixed
Cost per
Month
$ 1,400
$ 4,200
$ 8,300
$ 1,900
$ 1,400
Administrative expenses
Total expense
Net operating income
Cost per
Car Washed
$ 0.40
8,600
$ 53,100
$ 0.07
$ 0.20
$0.30
3,900
1,965
1,940
7,110
8,300
2,100
1,470
26,785
$26,315
$ 0.02
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
variancel Innut all amounte se nocitive values I
Transcribed Image Text: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.)
Cars washed
Revenue
Expenses:
Cleaning supplies
Electricity
Maintenance
Wages and salaries
Depreciation
Rent
Administrative expenses
Total expense
Net operating income
Actual
Results
$
Lavage Rapide
Flexible Budget Performance Report
For the Month Ended August 31
$
8,600
53,100
3,900
1,965
1,940
7,110
8,300
2,100
1,470
26,785
26,315
Flexible
Budget
Planning
Budget
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