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: Cleaning supplies Electricity Maintenance Rent Actual cars washed Revenue Wages and salaries Depreciation Administrative expenses $ 0.10 For example, electricity costs should be $1,200 per month plus $0.15 per car washed. The company expects to wash 9,000 cars in August and to collect an average of $4.90 per car washed. The actual operating results for August are as follows: Lavage Rapide Income Statement For the Month Ended August 31 Expenses: Cleaning supplies Electricity Maintenance Wages and salaries Depreciation Rent Fixed Cost per Month $ 1,200 $5,000 $ 6,000 $ 8,000 $4,000 Administrative expenses Total expense Net operating income Cost per Car Washed 8,800 $ 43,080 $0.80 $ 0.15 $ 0.20 $0.30 7,560 2,670 2,260 8,500 6,000 8,000 4,950 39,940 $ 3,140 Required: Calculate the company's revenue and spending variances for August. (Indicate the effect of each variance by selecting "F" for

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: Cleaning supplies Electricity Maintenance Rent Actual cars washed Revenue Wages and salaries Depreciation Administrative expenses $ 0.10 For example, electricity costs should be $1,200 per month plus $0.15 per car washed. The company expects to wash 9,000 cars in August and to collect an average of $4.90 per car washed. The actual operating results for August are as follows: Lavage Rapide Income Statement For the Month Ended August 31 Expenses: Cleaning supplies Electricity Maintenance Wages and salaries Depreciation Rent Fixed Cost per Month $ 1,200 $5,000 $ 6,000 $ 8,000 $4,000 Administrative expenses Total expense Net operating income Cost per Car Washed 8,800 $ 43,080 $0.80 $ 0.15 $ 0.20 $0.30 7,560 2,670 2,260 8,500 6,000 8,000 4,950 39,940 $ 3,140 Required: Calculate the company's revenue and spending variances for August. (Indicate the effect of each variance by selecting "F" for

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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