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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 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
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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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 estimates concerning the company's costs: Cleaning supplies Electricity Maintenance Rent Actual cars washed Revenue Expenses: 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 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 favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.)
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 estimates concerning the company's costs: Cleaning supplies Electricity Maintenance Rent Actual cars washed Revenue Expenses: 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 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 favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.)
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