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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: Cleaning supplies Electricity Maintenance Wages and salaries Depreciation Rent Administrative expenses $ 0.03 For example, electricity costs are $1,300 per month plus $0.06 per car washed. The company actually washed 8,600 cars in August and collected an average of $6.10 per car washed. Required: Prepare the company's flexible budget for August. Actual cars washed Answer is complete but not entirely correct. Lavage Rapide Flexible Budget For the Month Ended August 31 Revenue Expenses: Cleaning supplies Electricity Maintenance Wages and salaries Depreciation Rent Administrative expenses Fixed Cost Cost per Car per Month Washed $ 1,300 $ 4,500 $ 8,100 Total expense Net operating income $ 2,000 $ 1,300 $ $ XX 0 $0.40 $ 0.06 $ 0.15 $ 0.30 0X 0x 0x 0x 0x 0 0x 0 0

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: Cleaning supplies Electricity Maintenance Wages and salaries Depreciation Rent Administrative expenses $ 0.03 For example, electricity costs are $1,300 per month plus $0.06 per car washed. The company actually washed 8,600 cars in August and collected an average of $6.10 per car washed. Required: Prepare the company's flexible budget for August. Actual cars washed Answer is complete but not entirely correct. Lavage Rapide Flexible Budget For the Month Ended August 31 Revenue Expenses: Cleaning supplies Electricity Maintenance Wages and salaries Depreciation Rent Administrative expenses Fixed Cost Cost per Car per Month Washed $ 1,300 $ 4,500 $ 8,100 Total expense Net operating income $ 2,000 $ 1,300 $ $ XX 0 $0.40 $ 0.06 $ 0.15 $ 0.30 0X 0x 0x 0x 0x 0 0x 0 0

FINANCIAL ACCOUNTING
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: Cleaning supplies Electricity Maintenance Rent Wages and salaries. Depreciation Administrative expenses $ 0.03 For example, electricity costs are $1,300 per month plus $0.06 per car washed. The company actually washed 8,600 cars in August and collected an average of $6.10 per car washed. Actual cars washed Revenue Expenses: Required: Prepare the company's flexible budget for August. Cleaning supplies Electricity Maintenance Answer is complete but not entirely correct. Lavage Rapide Flexible Budget For the Month Ended August 31 Wages and salaries Depreciation Rent Administrative expenses Total expense Net operating income Fixed Cost Cost per Car per Month Washed $0.40 $ 0.06 $0.15 $0.30 ✓ $1,300 $ 4,500 $ 8,100 $ $ $ 2,000 $ 1,300 0x 0x 0x 0x 0x 0x 0x 0x 0x 0 0
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: Cleaning supplies Electricity Maintenance Rent Wages and salaries. Depreciation Administrative expenses $ 0.03 For example, electricity costs are $1,300 per month plus $0.06 per car washed. The company actually washed 8,600 cars in August and collected an average of $6.10 per car washed. Actual cars washed Revenue Expenses: Required: Prepare the company's flexible budget for August. Cleaning supplies Electricity Maintenance Answer is complete but not entirely correct. Lavage Rapide Flexible Budget For the Month Ended August 31 Wages and salaries Depreciation Rent Administrative expenses Total expense Net operating income Fixed Cost Cost per Car per Month Washed $0.40 $ 0.06 $0.15 $0.30 ✓ $1,300 $ 4,500 $ 8,100 $ $ $ 2,000 $ 1,300 0x 0x 0x 0x 0x 0x 0x 0x 0x 0 0
Expert Solution
Step 1

Introduction:

In preparing flexible budget for the company, fixed expenses are taken as budgeted and variable expenses are considered on the basis of actual quantity. Variable expenses are calculated as under:

Variable expenses = Actual quantity * Variable cost per unit

 

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