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 Cost per per Month Car Washed $0.70 $0.06 $0.30 $0.30 Cleaning supplies Electricity Maintenance $1,000 Wages and salaries Depreciation $4,100 $8,000 $2,200 Rent Administrative $1,300 $0.01 expenses For example, electricity costs are $1,000 per month plus $0.06 per car washed. The company expects to wash 8,400 cars in August and to collect an average of $5.90 per car washed. The actual operating results for August appear below. Lavage Rapide Income Statement For the Month Ended August 31 Actual cars washed 8,500 Revenue $51,660 Expenses: Cleaning supplies Electricity 6,380 1,474 2,760 6,980 8,000 2,400 Maintenance Wages and salaries Depreciation Rent Administrative 1,284 expenses Total expense 29,278 Net operating income $22,382 Required: Prepare a flexible budget performance report that shows the company's revenue and spending variances and activity variances for August. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and
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 Cost per per Month Car Washed $0.70 $0.06 $0.30 $0.30 Cleaning supplies Electricity Maintenance $1,000 Wages and salaries Depreciation $4,100 $8,000 $2,200 Rent Administrative $1,300 $0.01 expenses For example, electricity costs are $1,000 per month plus $0.06 per car washed. The company expects to wash 8,400 cars in August and to collect an average of $5.90 per car washed. The actual operating results for August appear below. Lavage Rapide Income Statement For the Month Ended August 31 Actual cars washed 8,500 Revenue $51,660 Expenses: Cleaning supplies Electricity 6,380 1,474 2,760 6,980 8,000 2,400 Maintenance Wages and salaries Depreciation Rent Administrative 1,284 expenses Total expense 29,278 Net operating income $22,382 Required: Prepare a flexible budget performance report that shows the company's revenue and spending variances and activity variances for August. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and
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 Cost per
per Month Car Washed
$0.70
$0.06
$0.30
$0.30
Cleaning supplies
Electricity
Maintenance
$1,000
Wages and salaries
Depreciation
$4,100
$8,000
$2,200
Rent
Administrative
$1,300
$0.01
expenses
For example, electricity costs are $1,000 per month plus $0.06 per car washed. The company expects to wash 8,400
cars in August and to collect an average of $5.90 per car washed.
The actual operating results for August appear below.
Lavage Rapide
Income Statement
For the Month Ended August 31
Actual cars washed
8,500
Revenue
$51,660
Expenses:
Cleaning supplies
Electricity
6,380
1,474
2,760
6,980
8,000
2,400
Maintenance
Wages and salaries
Depreciation
Rent
Administrative
1,284
expenses
Total expense
29,278
Net operating income $22,382
Required:
Prepare a flexible budget performance report that shows the company's revenue and spending variances and activity
variances for August. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F03191458-7d30-4b7a-a32c-2a2b6b9a178c%2Faf48608b-8e85-49bb-b4df-4d4a1adb93f7%2Fqe6irsn.png&w=3840&q=75)
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:
Fixed Cost Cost per
per Month Car Washed
$0.70
$0.06
$0.30
$0.30
Cleaning supplies
Electricity
Maintenance
$1,000
Wages and salaries
Depreciation
$4,100
$8,000
$2,200
Rent
Administrative
$1,300
$0.01
expenses
For example, electricity costs are $1,000 per month plus $0.06 per car washed. The company expects to wash 8,400
cars in August and to collect an average of $5.90 per car washed.
The actual operating results for August appear below.
Lavage Rapide
Income Statement
For the Month Ended August 31
Actual cars washed
8,500
Revenue
$51,660
Expenses:
Cleaning supplies
Electricity
6,380
1,474
2,760
6,980
8,000
2,400
Maintenance
Wages and salaries
Depreciation
Rent
Administrative
1,284
expenses
Total expense
29,278
Net operating income $22,382
Required:
Prepare a flexible budget performance report that shows the company's revenue and spending variances and activity
variances for August. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and
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