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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: Fixed Cost Cost per

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 Cost per

FINANCIAL ACCOUNTING
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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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: Cost per Car Washed Cleaning supplies Electricity Maintenance Wages and salaries Depreciation Rent Administrative expenses Fixed Cost per Month $ 0.60 $ 1,100 $ 0.07 $ 0.25 $ 4,000 $ 0.20 $ 8,300 $ 2,100 $ 1,700 $ 0.02 For example, electricity costs should be $1,100 per month plus $0.07 per car washed. The company expects to wash 8,400 cars in August and to collect an average of $6.10 per car washed. The actual operating results for August are as follows: Lavage Rapide Income Statement For the Month Ended August 31 Actual cars washed Revenue Expenses: Cleaning supplies Electricity Maintenance Wages and salaries Depreciation Rent Administrative expenses Total expense Net operating income Required: 8,500 $53,340 5,540 1,658 2,340 6,040 8,300 2,300 1,768 27,946 $ 25,394 Prepare a flexible budget performance report that shows the company's revenue and spending variances and activity variances for August Note: Indicate the effect of each varlance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (l.e., zero variance). Input all amounts as positive values. Cars washed Revenue Lavage Rapide Flexible Budget Performance Report For the Month Ended August 31 Actual Results 8,500 $ 53,340 Expenses: Cleaning supplies 5,540 Electricity 1,658 Maintenance 2,340 Wages and salaries 6,040 Flexible Budget
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: Cost per Car Washed Cleaning supplies Electricity Maintenance Wages and salaries Depreciation Rent Administrative expenses Fixed Cost per Month $ 0.60 $ 1,100 $ 0.07 $ 0.25 $ 4,000 $ 0.20 $ 8,300 $ 2,100 $ 1,700 $ 0.02 For example, electricity costs should be $1,100 per month plus $0.07 per car washed. The company expects to wash 8,400 cars in August and to collect an average of $6.10 per car washed. The actual operating results for August are as follows: Lavage Rapide Income Statement For the Month Ended August 31 Actual cars washed Revenue Expenses: Cleaning supplies Electricity Maintenance Wages and salaries Depreciation Rent Administrative expenses Total expense Net operating income Required: 8,500 $53,340 5,540 1,658 2,340 6,040 8,300 2,300 1,768 27,946 $ 25,394 Prepare a flexible budget performance report that shows the company's revenue and spending variances and activity variances for August Note: Indicate the effect of each varlance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (l.e., zero variance). Input all amounts as positive values. Cars washed Revenue Lavage Rapide Flexible Budget Performance Report For the Month Ended August 31 Actual Results 8,500 $ 53,340 Expenses: Cleaning supplies 5,540 Electricity 1,658 Maintenance 2,340 Wages and salaries 6,040 Flexible Budget
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