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 Rent Wages and salaries. Depreciation Administrative expenses $ 0.02 For example, electricity costs should be $1,400 per month plus $0.08 per car washed. The company expects to wash 8,400 cars i August and to collect an average of $6.20 per car washed. The actual operating results for August are as follows: Actual cars washed Revenue Lavage Rapide Income Statement For the Month Ended August 31 Expenses: I Cleaning supplies. Electricity Maintenance Wages and salaries Depreciation Rent Fixed Cost per Cost per Month Car Washed $1,400 $4,600 $ 8,300 $ 2,100 $1,500 Administrative expenses Total expenses Net operating income 8,500 $ 54,100 $0.60 0.08 5,540 2,042 1,500 6,640 8,300 2,300 1,568 27,890 $26,290 $ $ 0.15 $ 0.20 Required: Calculate the company's revenue and spending variances for August.
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 Rent Wages and salaries. Depreciation Administrative expenses $ 0.02 For example, electricity costs should be $1,400 per month plus $0.08 per car washed. The company expects to wash 8,400 cars i August and to collect an average of $6.20 per car washed. The actual operating results for August are as follows: Actual cars washed Revenue Lavage Rapide Income Statement For the Month Ended August 31 Expenses: I Cleaning supplies. Electricity Maintenance Wages and salaries Depreciation Rent Fixed Cost per Cost per Month Car Washed $1,400 $4,600 $ 8,300 $ 2,100 $1,500 Administrative expenses Total expenses Net operating income 8,500 $ 54,100 $0.60 0.08 5,540 2,042 1,500 6,640 8,300 2,300 1,568 27,890 $26,290 $ $ 0.15 $ 0.20 Required: Calculate the company's revenue and spending variances for August.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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
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
Rent
Wages and salaries.
Depreciation
Administrative expenses
$ 0.02
For example, electricity costs should be $1,400 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 actual operating results for August are as follows:
Lavage Rapide
Income Statement
For the Month Ended August 31
Actual cars washed
Revenue
Expenses:
I Cleaning supplies.
Electricity
Maintenance
Wages and salaries
Depreciation
Fixed
Cost per Cost per
Month
Car Washed
$0.60
$1,400
$ 0.08
$4,600
$ 8,300
$ 2,100
$1,500
Rent
Administrative expenses
Total expenses
Net operating income
8,500
$ 54,100
$ 0.15
$ 0.20
5,540
2,042
1,500
6,640
8,300
2,300
1,568
27,890
$26,290
Required:
Calculate the company's revenue and spending variances for August.
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