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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 Fixed Cost per Month Cost per Car Washed $ 0.70

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 Fixed Cost per Month Cost per Car Washed $ 0.70

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: Cleaning supplies Electricity Maintenance Wages and salaries Depreciation Rent Administrative expenses Fixed Cost per Month $1,100 $4,400 $ 8,300 $1,900 Cost per Car Washed $ 0.70 $ 0.09 $ 0.10 $ 0.20 $ 1,400 $ 0.02 For example, electricity costs should be $1,100 per month plus $0.09 per car washed. The company expects to wash 8,300 cars in August and to collect an average of $6.50 per car washed. The company actually washed 8,400 cars in August. Required: Calculate the company's activity 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 Wages and salaries Depreciation Rent Administrative expenses Fixed Cost per Month $1,100 $4,400 $ 8,300 $1,900 Cost per Car Washed $ 0.70 $ 0.09 $ 0.10 $ 0.20 $ 1,400 $ 0.02 For example, electricity costs should be $1,100 per month plus $0.09 per car washed. The company expects to wash 8,300 cars in August and to collect an average of $6.50 per car washed. The company actually washed 8,400 cars in August. Required: Calculate the company's activity 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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