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 MonthCost per Car WashedCleaning supplies $ 0.70Electricity$ 1,100$ 0.10Maintenance $ 0.15Wages and salaries$ 4,400$ 0.30Depreciation$ 8,100 Rent$ 2,100 Administrative expenses$ 1,300$ 0.04 For example, electricity costs are $1,100 per month plus $0.10 per car washed. The company actually washed 8,500 cars in August and collected an average of $6.60 per car washed. Required:Prepare the company’s flexible budget for August.

Solution: To Prepare the Flexible first of all we need to determine the Revenue at standard rate…

Answered: Lavage Rapide is a Canadian company…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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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	$ 1,100	$ 0.10
Maintenance		$ 0.15
Wages and salaries	$ 4,400	$ 0.30
Depreciation	$ 8,100
Rent	$ 2,100
Administrative expenses	$ 1,300	$ 0.04

For example, electricity costs are $1,100 per month plus $0.10 per car washed. The company actually washed 8,500 cars in August and collected an average of $6.60 per car washed.

Required:

Prepare the company’s flexible budget for August.

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