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 Cost per Car Cleaning supplies Electricity Maintenance Wages and salaries Depreciation Rent Administrative expenses per Month washed $ 0.70 $ 1,100 $ 0.06 $ 0.10 $ 4,500 $ 0.20 $ 8,300 $ 2,180 $ 1,700 $ 0.03 For example, electricity costs should be $1,100 per month plus $0.06 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 8,300 $ 56,220 6,240 1,562 Maintenance 1,060 wages and salaries 6,500 Depreciation 8,300 2,300 Administrative expenses 1,846 27,808 $ 28,412 Rent Total expense Net operating income Required: Calculate the company's revenue and spending variances for August. Note: Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (l.e., zero variance). Input all amounts as positive values. Revenue Expenses: Lavage Rapide Revenue and Spending Variances For the Month Ended August 31 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 estimates concerning the company's costs: Fixed Cost Cost per Car Cleaning supplies Electricity Maintenance Wages and salaries Depreciation Rent Administrative expenses per Month washed $ 0.70 $ 1,100 $ 0.06 $ 0.10 $ 4,500 $ 0.20 $ 8,300 $ 2,180 $ 1,700 $ 0.03 For example, electricity costs should be $1,100 per month plus $0.06 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 8,300 $ 56,220 6,240 1,562 Maintenance 1,060 wages and salaries 6,500 Depreciation 8,300 2,300 Administrative expenses 1,846 27,808 $ 28,412 Rent Total expense Net operating income Required: Calculate the company's revenue and spending variances for August. Note: Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (l.e., zero variance). Input all amounts as positive values. Revenue Expenses: Lavage Rapide Revenue and Spending Variances For the Month Ended August 31 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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Vikrambhai
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 Cost per Car
Cleaning supplies
Electricity
Maintenance
Wages and salaries
Depreciation
Rent
Administrative expenses
per Month
washed
$ 0.70
$ 1,100
$ 0.06
$ 0.10
$ 4,500
$ 0.20
$ 8,300
$ 2,180
$ 1,700
$ 0.03
For example, electricity costs should be $1,100 per month plus $0.06 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
8,300
$ 56,220
6,240
1,562
Maintenance
1,060
wages and salaries
6,500
Depreciation
8,300
2,300
Administrative expenses
1,846
27,808
$ 28,412
Rent
Total expense
Net operating income
Required:
Calculate the company's revenue and spending variances for August.
Note: Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (l.e., zero
variance). Input all amounts as positive values.
Revenue
Expenses:
Lavage Rapide
Revenue and Spending Variances
For the Month Ended August 31
Cleaning supplies
Electricity
Maintenance
Wages and salaries
Depreciation
Rent
Administrative expenses
Total expense
Net operating income
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