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 Cost per per Month Car Washed Cleaning supplies Electricity Maintenance $0.70 $0.09 $1,000 $0.15 Wages and salaries Depreciation Rent $4,700 $8,400 $1,900 $1,700 $0.40 Administrative expenses $0.05 For example, electricity costs are $1,000 per month plus $0.09 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 8,500 Revenue $ 54,180 Expenses: Cleaning supplies Electricity Maintenance 6,380 1,726 1,500 8,420 8,400 2,100 2,020 30,546 $ 23,634 Wages and salaries Depreciation Rent Administrative expenses Total expense Net operating income Required: 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 Revenue and Spending Variances For the Month Ended August 31 Revenue Expenses: Cleaning supplies Electricity Maintenance Wages and salaries Depreciation Rent Administrative expenses Total expense Net operating income
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 Cost per per Month Car Washed Cleaning supplies Electricity Maintenance $0.70 $0.09 $1,000 $0.15 Wages and salaries Depreciation Rent $4,700 $8,400 $1,900 $1,700 $0.40 Administrative expenses $0.05 For example, electricity costs are $1,000 per month plus $0.09 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 8,500 Revenue $ 54,180 Expenses: Cleaning supplies Electricity Maintenance 6,380 1,726 1,500 8,420 8,400 2,100 2,020 30,546 $ 23,634 Wages and salaries Depreciation Rent Administrative expenses Total expense Net operating income Required: 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 Revenue and Spending Variances For the Month Ended August 31 Revenue Expenses: Cleaning supplies Electricity Maintenance Wages and salaries Depreciation Rent Administrative expenses Total expense Net operating income
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 data concerning the company's costs:
Fixed Cost
Cost per
per Month
Car Washed
Cleaning supplies
Electricity
Maintenance
$0.70
$0.09
$1,000
$0.15
Wages and salaries
Depreciation
Rent
$4,700
$8,400
$1,900
$1,700
$0.40
Administrative expenses
$0.05
For example, electricity costs are $1,000 per month plus $0.09 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
8,500
Revenue
$ 54,180
Expenses:
Cleaning supplies
Electricity
Maintenance
6,380
1,726
1,500
8,420
8,400
2,100
2,020
30,546
$ 23,634
Wages and salaries
Depreciation
Rent
Administrative expenses
Total expense
Net operating income
Transcribed Image Text:Required:
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
Revenue and Spending Variances
For the Month Ended August 31
Revenue
Expenses:
Cleaning supplies
Electricity
Maintenance
Wages and salaries
Depreciation
Rent
Administrative expenses
Total expense
Net operating income
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