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 $ 0.70 Electricity $ 1,300 $ 0.08 Maintenance $ 0.10 Wages and salaries $ 4,700 $ 0.30 Depreciation $ 8,100 Rent $ 2,000 Administrative expenses $ 1,400 $ 0.04 For example, electricity costs are $1,300 per month plus $0.08 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 actual operating results for August are as follows: Lavage Rapide Income Statement For the Month Ended August 31 Actual cars washed 8,100 Revenue $ 52,500 Expenses: Cleaning supplies 6,100 Electricity 1,910 Maintenance 1,040 Wages and salaries 7,460 Depreciation 8,100 Rent 2,200 Administrative expenses 1,620 Total expense 28,430 Net operating income $ 24,070 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. Do not round intermediate calculations.) 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

FINANCIAL ACCOUNTING

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ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

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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			$	0.70
Electricity	$	1,300	$	0.08
Maintenance			$	0.10
Wages and salaries	$	4,700	$	0.30
Depreciation	$	8,100
Rent	$	2,000
Administrative expenses	$	1,400	$	0.04

For example, electricity costs are $1,300 per month plus $0.08 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 actual operating results for August are as follows:

Lavage Rapide
Income Statement
For the Month Ended August 31
Actual cars washed		8,100

Revenue	$	52,500
Expenses:
Cleaning supplies		6,100
Electricity		1,910
Maintenance		1,040
Wages and salaries		7,460
Depreciation		8,100
Rent		2,200
Administrative expenses		1,620
Total expense		28,430
Net operating income	$	24,070

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. Do not round intermediate calculations.)

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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