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 per Month Cost per Car Washed Cleaning supplies   $ 0.80 Electricity $ 1,200 $ 0.09 Maintenance   $ 0.15 Wages and salaries $ 4,500 $ 0.40 Depreciation $ 8,100   Rent $ 1,800   Administrative expenses $ 1,600 $ 0.02 For example, electricity costs should be $1,200 per month plus $0.09 per car washed. The company expects to wash 8,300 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 8,400 Revenue $ 52,730 Expenses:   Cleaning supplies 7,140 Electricity 1,917 Maintenance 1,485 Wages and salaries 8,180 Depreciation 8,100 Rent 2,000 Administrative expenses 1,666 Total expense 30,488 Net operating income $ 22,242 Required: Prepare a flexible budget performance report that shows the company’s revenue and spending variances and activity variances for August.

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Chapter1: Financial Statements And Business Decisions
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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 per Month Cost per Car Washed
Cleaning supplies   $ 0.80
Electricity $ 1,200 $ 0.09
Maintenance   $ 0.15
Wages and salaries $ 4,500 $ 0.40
Depreciation $ 8,100  
Rent $ 1,800  
Administrative expenses $ 1,600 $ 0.02

For example, electricity costs should be $1,200 per month plus $0.09 per car washed. The company expects to wash 8,300 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 8,400
Revenue $ 52,730
Expenses:  
Cleaning supplies 7,140
Electricity 1,917
Maintenance 1,485
Wages and salaries 8,180
Depreciation 8,100
Rent 2,000
Administrative expenses 1,666
Total expense 30,488
Net operating income $ 22,242

Required:

Prepare a flexible budget performance report that shows the company’s revenue and spending variances and activity variances for August.

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