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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 Fixed Cost per Month $ 1,200 $ 5,000 $ 6,000 $ 8,000 $ 4,000 Cost per Car Washed $ 0.80 $ 0.15 $ 0.20 $ 0.30 $ 0.10 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 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 Fixed Cost per Month $ 1,200 $ 5,000 $ 6,000 $ 8,000 $ 4,000 Cost per Car Washed $ 0.80 $ 0.15 $ 0.20 $ 0.30 $ 0.10 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:

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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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 Rent Administrative expenses Actual cars washed Revenue Expenses: Cleaning supplies Electricity Maintenance Wages and salaries Depreciation Rent Fixed Cost per Month $1,200 $5,000 $ 6,000 $ 8,000 $ 4,000 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 For the Month Ended August 31 Administrative expenses Total expenses Net operating income. Cost per Car Washed 8,800 $ 43,080 7,560 2,670 2,260 $0.80 $0.15 8,500 6,000 8,000 4,950 39,940 $3,140 $0.20 $ 0.30 $ 0.10
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 Rent Administrative expenses Actual cars washed Revenue Expenses: Cleaning supplies Electricity Maintenance Wages and salaries Depreciation Rent Fixed Cost per Month $1,200 $5,000 $ 6,000 $ 8,000 $ 4,000 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 For the Month Ended August 31 Administrative expenses Total expenses Net operating income. Cost per Car Washed 8,800 $ 43,080 7,560 2,670 2,260 $0.80 $0.15 8,500 6,000 8,000 4,950 39,940 $3,140 $0.20 $ 0.30 $ 0.10
Required: Calculate the company's revenue and spending 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 positivalues. Revenue Expenses: Lavage Rapide Revenue and Spending Variances For the Month Ended August 31 Cleaning supplies Electricity Maintenance Wages and salaries Depreciation Rent Administrative expenses Total expenses Net operating income
Transcribed Image Text:Required: Calculate the company's revenue and spending 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 positivalues. Revenue Expenses: Lavage Rapide Revenue and Spending Variances For the Month Ended August 31 Cleaning supplies Electricity Maintenance Wages and salaries Depreciation Rent Administrative expenses Total expenses Net operating income
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