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 per Month Cost per Car Washed Cleaning supplies $ 0.70 Electricity $ 1,300 $ 0.07 Maintenance $ 0.20 Wages and salaries $ 4,500 $ 0.40 Depreciation $ 8,100 Rent $ 2,000 Administrative expenses $ 1,400 $ 0.05 For example, electricity costs should be $1,300 per month plus $0.07 per car washed. The company expects to wash 8,000 cars in August and to collect an average of $6.10 per car washed. Required: Prepare the company’s planning budget for August.
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 per Month Cost per Car Washed Cleaning supplies $ 0.70 Electricity $ 1,300 $ 0.07 Maintenance $ 0.20 Wages and salaries $ 4,500 $ 0.40 Depreciation $ 8,100 Rent $ 2,000 Administrative expenses $ 1,400 $ 0.05 For example, electricity costs should be $1,300 per month plus $0.07 per car washed. The company expects to wash 8,000 cars in August and to collect an average of $6.10 per car washed. Required: Prepare the company’s planning budget for August.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
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 per Month |
Cost per Car Washed |
||||
| Cleaning supplies | $ | 0.70 | |||
| Electricity | $ | 1,300 | $ | 0.07 | |
| Maintenance | $ | 0.20 | |||
| Wages and salaries | $ | 4,500 | $ | 0.40 | |
| $ | 8,100 | ||||
| Rent | $ | 2,000 | |||
| Administrative expenses | $ | 1,400 | $ | 0.05 | |
For example, electricity costs should be $1,300 per month plus $0.07 per car washed. The company expects to wash 8,000 cars in August and to collect an average of $6.10 per car washed.
Required:
Prepare the company’s planning budget for August.
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