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 Administrative expenses Rent For the Month Ended August 31 Actual cars washed Revenue Expenses: Cleaning supplies Electricity Maintenance For example, electricity costs should be $1,200 per month plus $0.15 per car washed. The company expects to wash 9,000 cars in August and to collect an average of $4.90 per car washed. The actual operating results for August are as follows: Lavage Rapide Income Statement Wages and salaries Depreciation Fixed Cost per Month $ 1,200 $5,000 $ 6,000 $ 8,000 $ 4,000 Rent Administrative expenses Total expense Net operating income Cost per Car Washed 8,800 $ 43,080 7,560 2,670 2,260 8,500 6,000 $0.80 $ 0.15 $ 0.20 $ 0.30 8,000 4,950 39,940 $ 3,140 $0.10 Required: 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 variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.
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 Administrative expenses Rent For the Month Ended August 31 Actual cars washed Revenue Expenses: Cleaning supplies Electricity Maintenance For example, electricity costs should be $1,200 per month plus $0.15 per car washed. The company expects to wash 9,000 cars in August and to collect an average of $4.90 per car washed. The actual operating results for August are as follows: Lavage Rapide Income Statement Wages and salaries Depreciation Fixed Cost per Month $ 1,200 $5,000 $ 6,000 $ 8,000 $ 4,000 Rent Administrative expenses Total expense Net operating income Cost per Car Washed 8,800 $ 43,080 7,560 2,670 2,260 8,500 6,000 $0.80 $ 0.15 $ 0.20 $ 0.30 8,000 4,950 39,940 $ 3,140 $0.10 Required: 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 variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.
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 estimates concerning the company's costs:
Cleaning supplies
Electricity
Maintenance
Wages and salaries
Depreciation
Administrative expenses
Rent
Actual cars washed
Revenue
For the Month Ended August 31
Expenses:
For example, electricity costs should be $1,200 per month plus $0.15 per car washed. The company expects to
wash 9,000 cars in August and to collect an average of $4.90 per car washed.
The actual operating results for August are as follows:
Lavage Rapide
Income Statement
Cleaning supplies
Electricity
Maintenance
Wages and salaries.
Depreciation
Fixed
Cost per
Month
Rent
$ 1,200
$ 5,000
$ 6,000
$ 8,000
$ 4,000
Administrative expenses
Total expense
Net operating income
Cost per
Car Washed
$ 0.80
$ 0.15
$0.20
$ 0.30
8,800
$ 43,080
$ 0.10
7,560
2,670
2,260
8,500
6,000
8,000
4,950
39,940
$ 3,140
Required:
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 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:Cars washed
Revenue
Expenses:
Cleaning supplies
Electricity
Maintenance
Wages and salaries
Depreciation
Rent
Administrative expenses
Total expense
Net operating income
Actual
Results
8,800
$ 43,080
$
7,560
2,670
2,260
8,500
6,000
8,000
4,950
39,940
3,140
$
Lavage Rapide
Flexible Budget Performance Report
For the Month Ended August 31
Activity Variances
40 U
$
Flexible
Budget
8,800
43,120
$
980 F
Planning
Budget
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