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 per Month Cost per Car Washed $0.50 $ 0.05 $0.20 $0.30 Cleaning supplies Electricity Maintenance Wages and salaries Depreciation $ 4,600 $ 8,400 $2,100 Administrative expenses $ 1,700 $ 0.04 For example, electricity costs are $1,300 per month plus $0.05 per car washed. The company expects to wash 8,200 cars in August and to collect an average of $6.70 per car washed. The actual operating results for August are as follows: Rent Lavage Rapide Income Statement For the Month Ended August 31 Actual cars washed Revenue Expenses: Cleaning supplies $ 1,300 Electricity Maintenance Wages and salaries Depreciation Rent Administrative expenses Total expense Net operating income 8,300 $ 57,040 4,600 1,680 1,880 7,420 8,400 2,300 1,928 28,208 $ 28,832 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. Do not round intermediate calculations.)
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 per Month Cost per Car Washed $0.50 $ 0.05 $0.20 $0.30 Cleaning supplies Electricity Maintenance Wages and salaries Depreciation $ 4,600 $ 8,400 $2,100 Administrative expenses $ 1,700 $ 0.04 For example, electricity costs are $1,300 per month plus $0.05 per car washed. The company expects to wash 8,200 cars in August and to collect an average of $6.70 per car washed. The actual operating results for August are as follows: Rent Lavage Rapide Income Statement For the Month Ended August 31 Actual cars washed Revenue Expenses: Cleaning supplies $ 1,300 Electricity Maintenance Wages and salaries Depreciation Rent Administrative expenses Total expense Net operating income 8,300 $ 57,040 4,600 1,680 1,880 7,420 8,400 2,300 1,928 28,208 $ 28,832 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. Do not round intermediate calculations.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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 per Month Cost per Car Washed
$ 0.50
$ 0.05
$ 0.20
$ 0.30
Cleaning supplies
Electricity
Maintenance
Wages and salaries
Depreciation
Rent
$2,100
Administrative expenses $1,700
$ 0.04
For example, electricity costs are $1,300 per month plus $0.05 per car washed. The company expects to wash 8,200 cars in August and
to collect an average of $6.70 per car washed.
The actual operating results for August are as follows:
Revenue
Expenses:
Lavage Rapide
Income Statement
For the Month Ended August 31
Actual cars washed
Cleaning supplies
Electricity
$ 1,300
Maintenance
$4,600
$ 8,400
Wages and salaries
Depreciation
Rent
Administrative expenses
Total expense
Net operating income
8,300
$ 57,040
4,600
1,680
1,880
7,420
8,400
2,300
1,928
28,208
$ 28,832
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. Do not round
intermediate calculations.)
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