Lavage Rapide owns and operates a large automatic car wash facility near Montreal. The following table provides estimatesconcerning the company's costs:Cleaning suppliesElectricityMaintenanceRentWages and salaries.DepreciationAdministrative expensesFor example, electricity costs should be $1,300 per month plus $0.08 per car washed. The company expects to wash 8,000 cars inAugust and to collect an average of $6.70 per car washed. The company actually washed 8,100 cars in August.RevenueExpenses:FixedCost per Cost perMonthCar Washed$ 1,300$4,400$ 8,300$2,000$ 1,700Lavage RapideActivity VariancesFor the Month Ended August 31Cleaning suppliesElectricityMaintenanceWages and salariesDepreciationRent$ 0.70$ 0.08Required: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., zerovariance). Input all amounts as positive values.Administrative expensesTotal expensesNet operating income$ 0.15$ 0.20$ 0.04

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: For example, electricity costs should be $1,300 per month plus $0.08 per car washed. The company expects to wash 8,000 cars in August and to collect an average of $6.70 per car washed. The company actually washed 8,100 cars in August. Fixed Cost per Month $ 1,300 $4,400 $ 8,300 $ 2,000 $ 1,700 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. Cleaning supplies Electricity Maintenance Wages and salaries Depreciation Rent Lavage Rapide Activity Variances For the Month Ended August 31 Cost per Car Washed $ 0.70 $ 0.08 $ 0.15 $ 0.20 Administrative expenses Total expenses Net operating income $ 0.04

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: For example, electricity costs should be $1,300 per month plus $0.08 per car washed. The company expects to wash 8,000 cars in August and to collect an average of $6.70 per car washed. The company actually washed 8,100 cars in August. Fixed Cost per Month $ 1,300 $4,400 $ 8,300 $ 2,000 $ 1,700 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. Cleaning supplies Electricity Maintenance Wages and salaries Depreciation Rent Lavage Rapide Activity Variances For the Month Ended August 31 Cost per Car Washed $ 0.70 $ 0.08 $ 0.15 $ 0.20 Administrative expenses Total expenses Net operating income $ 0.04

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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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: Cleaning supplies Electricity Maintenance Wages and salaries Depreciation Administrative expenses Rent For example, electricity costs are $1,200 per month plus $0.09 per car washed. The company actually washed 8,400 cars in August and collected an average of $6.50 per car washed. Required: Prepare the company's flexible budget for August. Lavage Rapide Flexible Budget For the Month Ended August 31 Actual cars washed Revenue Expenses: Cleaning supplies Electricity Maintenance Fixed Cost per Month $ 1,200 $ 4,400 $ 8,000 $ 1,800 $ 1,600 Wages and salaries Depreciation Rent Cost per Car Washed $ 0.50 $ 0.09 $ 0.20 $ 0.20 Administrative expenses $ 0.04
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