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 Cleaning supplies $0.40 Electricity Maintenance $1,400 $0.08 $0.10 Wages and salaries $4,600 $0.30 Depreciation $8,500 Rent $1,900 Administrative expenses $1,500 $0.04 For example, electricity costs are $1,400 per month plus $0.08 per car washed. The company expects to wash 8,300 cars in August and to collect an average of $6.00 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 $51,900 Expenses: Cleaning supplies 3,820 Electricity 2,034 Maintenance 1,070 Wages and salaries 7,450 Depreciation 8,500 Rent 2,100 Administrative expenses 1,732 Total expense 26,706 Net operating income $25,194 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.) Lavage Rapide Revenue and Spending Variances For the Month Ended August 31 Revenue Expenses: F Cleaning supplies U Electricity Maintenance F Wages and salaries U Depreciation F Rent U Administrative expenses F Total expense Net operating income F
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 Cleaning supplies $0.40 Electricity Maintenance $1,400 $0.08 $0.10 Wages and salaries $4,600 $0.30 Depreciation $8,500 Rent $1,900 Administrative expenses $1,500 $0.04 For example, electricity costs are $1,400 per month plus $0.08 per car washed. The company expects to wash 8,300 cars in August and to collect an average of $6.00 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 $51,900 Expenses: Cleaning supplies 3,820 Electricity 2,034 Maintenance 1,070 Wages and salaries 7,450 Depreciation 8,500 Rent 2,100 Administrative expenses 1,732 Total expense 26,706 Net operating income $25,194 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.) Lavage Rapide Revenue and Spending Variances For the Month Ended August 31 Revenue Expenses: F Cleaning supplies U Electricity Maintenance F Wages and salaries U Depreciation F Rent U Administrative expenses F Total expense Net operating income F
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
Cleaning supplies
$0.40
Electricity
Maintenance
$1,400
$0.08
$0.10
Wages and salaries
$4,600
$0.30
Depreciation
$8,500
Rent
$1,900
Administrative expenses
$1,500
$0.04
For example, electricity costs are $1,400 per month plus $0.08 per car washed. The company expects to wash 8,300 cars in August
and to collect an average of $6.00 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
$51,900
Expenses:
Cleaning supplies
3,820
Electricity
2,034
Maintenance
1,070
Wages and salaries
7,450
Depreciation
8,500
Rent
2,100
Administrative expenses
1,732
Total expense
26,706
Net operating income
$25,194
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.)
Lavage Rapide
Revenue and Spending Variances
For the Month Ended August 31
Revenue
Expenses:
F
Cleaning supplies
U
Electricity
Maintenance
F
Wages and salaries
U
Depreciation
F
Rent
U
Administrative expenses
F
Total expense
Net operating income
F
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