Lavage Rapide 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 Fixed Cost per Month $ 1,200 $ 4,100 $ 8,100 $ 2,000 $ 1,400 Rent Cost per Car Washed $ 0.60 $ 0.08 $ 0.30 $ 0.20 Wages and salaries Depreciation Administrative expenses $ 0.04 For example, electricity costs should be $1,200 per month plus $0.08 per car washed. The company expects to wash 8,400 cars August and to collect an average of $6.20 per car washed. The company actually washed 8,500 cars in August. Required: Calculate the company's 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., ze

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Chapter1: Financial Statements And Business Decisions
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Lavage Rapide 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
Revenue
Expenses:
Fixed Cost
per Month
$ 1,200
$ 4,100
$ 8,100
$ 2,000
$ 1,400
$ 0.04
For example, electricity costs should be $1,200 per month plus $0.08 per car washed. The company expects to wash 8,400 cars in
August and to collect an average of $6.20 per car washed. The company actually washed 8,500 cars in August.
Cleaning supplies
Electricity
Maintenance
Wages and salaries
Depreciation
Rent
Required:
Calculate the company's 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
Activity Variances
For the Month Ended August 31
Administrative expenses
Total expenses
Net operating income
Cost per
Car Washed
$ 0.60
$ 0.08
$ 0.30
$ 0.20
Transcribed Image Text:Lavage Rapide 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 Revenue Expenses: Fixed Cost per Month $ 1,200 $ 4,100 $ 8,100 $ 2,000 $ 1,400 $ 0.04 For example, electricity costs should be $1,200 per month plus $0.08 per car washed. The company expects to wash 8,400 cars in August and to collect an average of $6.20 per car washed. The company actually washed 8,500 cars in August. Cleaning supplies Electricity Maintenance Wages and salaries Depreciation Rent Required: Calculate the company's 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 Activity Variances For the Month Ended August 31 Administrative expenses Total expenses Net operating income Cost per Car Washed $ 0.60 $ 0.08 $ 0.30 $ 0.20
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