Lavage Rapide is a Canadian company that owns and operates a large automatic carwash facility near Montreal. The following table provides data concerning the company’s costs: Fixed Costper Month Cost perCar Washed Cleaning supplies $ 0.80 Electricity $ 1,200 $ 0.15 Maintenance $ 0.20 Wages and salaries $ 5,000 $ 0.30 Depreciation $ 6,000 Rent $ 8,000 Administrative expenses $ 4,000 $ 0.10 For example, electricity costs are $1,200 per month plus $0.15 per car washed. The company expected to wash 9,000 cars in August and to collect an average of $4.90 per car washed. The actual operating results for August appear below. Lavage RapideIncome StatementFor the Month Ended August 31 Actual cars washed 8,800 Revenue $ 43,080 Expenses: Cleaning supplies 7,560 Electricity 2,670 Maintenance 2,260 Wages and salaries 8,500 Depreciation 6,000 Rent 8,000 Administrative expenses 4,950 Total expense 39,940 Net operating income $ 3,140 Required: Complete the flexible budget performance report that shows the company’s activity variances and 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.)

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter2: Building Blocks Of Managerial Accounting

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Lavage Rapide is a Canadian company that owns and operates a large automatic carwash facility near Montreal. The following table provides data concerning the company’s costs:

Fixed Cost
per Month

Cost per
Car Washed

Cleaning supplies			$	0.80
Electricity	$	1,200	$	0.15
Maintenance			$	0.20
Wages and salaries	$	5,000	$	0.30
Depreciation	$	6,000
Rent	$	8,000
Administrative expenses	$	4,000	$	0.10

For example, electricity costs are $1,200 per month plus $0.15 per car washed. The company expected to wash 9,000 cars in August and to collect an average of $4.90 per car washed.

The actual operating results for August appear below.

Lavage Rapide Income Statement For the Month Ended August 31
Actual cars washed		8,800
Revenue	$	43,080

Expenses:
Cleaning supplies		7,560
Electricity		2,670
Maintenance		2,260
Wages and salaries		8,500
Depreciation		6,000
Rent		8,000
Administrative expenses		4,950

Total expense		39,940

Net operating income	$	3,140

Required:

Complete the flexible budget performance report that shows the company’s activity variances and 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.)

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