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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 $1,000 $ 4,500 $ 8,300 $ 1,900 $ 1,700 Cost per Car Washed $ 0.60 $ 0.06 $ 0.25 $ 0.30 $ 0.04 For example, electricity costs should be $1,000 per month plus $0.06 per car washed. The company expects to wash 8,100 cars in August and to collect an average of $6.00 per car washed.

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 $1,000 $ 4,500 $ 8,300 $ 1,900 $ 1,700 Cost per Car Washed $ 0.60 $ 0.06 $ 0.25 $ 0.30 $ 0.04 For example, electricity costs should be $1,000 per month plus $0.06 per car washed. The company expects to wash 8,100 cars in August and to collect an average of $6.00 per car washed.

FINANCIAL ACCOUNTING
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 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 Actual cars washed Revenue Expenses: Cleaning supplies Electricity Maintenance Wages and salaries Depreciation $ 0.04 For example, electricity costs should be $1,000 per month plus $0.06 per car washed. The company expects to wash 8,100 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. Rent Fixed Cost per Month Administrative expenses Total expenses Net operating income $ 1,000 $ 4,500 $ 8,300 $ 1,900 $ 1,700 Cost per Car Washed 8,200 $ 50,700 $ 0.60 $ 0.06 5,360 1,456 2,265 7,290 8,300 2,100 1,924 28,695 $ 22,005 $ 0.25 $ 0.30
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 Actual cars washed Revenue Expenses: Cleaning supplies Electricity Maintenance Wages and salaries Depreciation $ 0.04 For example, electricity costs should be $1,000 per month plus $0.06 per car washed. The company expects to wash 8,100 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. Rent Fixed Cost per Month Administrative expenses Total expenses Net operating income $ 1,000 $ 4,500 $ 8,300 $ 1,900 $ 1,700 Cost per Car Washed 8,200 $ 50,700 $ 0.60 $ 0.06 5,360 1,456 2,265 7,290 8,300 2,100 1,924 28,695 $ 22,005 $ 0.25 $ 0.30
Required: Prepare a flexible budget performance report 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. Cars washed Revenue Expenses: Cleaning supplies Electricity Maintenance Wages and salaries Depreciation Rent Administrative expenses Total expenses Net operating income Lavage Rapide Flexible Budget Performance Report For the Month Ended August 31 Actual Results 8,200 $ 50,700 $ 5,360 1,456 2,265 7,290 8.300 2,100 1,924 28,695 22,005 Flexible Budget Planning Budget
Transcribed Image Text:Required: Prepare a flexible budget performance report 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. Cars washed Revenue Expenses: Cleaning supplies Electricity Maintenance Wages and salaries Depreciation Rent Administrative expenses Total expenses Net operating income Lavage Rapide Flexible Budget Performance Report For the Month Ended August 31 Actual Results 8,200 $ 50,700 $ 5,360 1,456 2,265 7,290 8.300 2,100 1,924 28,695 22,005 Flexible Budget Planning Budget
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