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provides estimates concerning the company's costs: Fixed Cost per Month Cost per Car Washed $0.80 $ 1,100 $ 4,500 $ 8,100 $ 1,900 $ 1,700 Cleaning supplies Electricity Maintenance Wages and salaries. Depreciation Administrative expenses Rent $ 0.03 For example, electricity costs should be $1,100 per month plus $0.09 per car washed. The company expects to wash 8,400 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 Actual cars washed. Revenue Expenses: Cleaning supplies Electricity Maintenance Rent Wages and salaries Depreciation Administrative expenses. Total expense Net operating income 8,500 $ 52,500 7,220 1,826 2,760 8,220 $ 0.09 $0.30 $ 0.40 8,100 2,100 1,852 32,078 $ 20,422

provides estimates concerning the company's costs: Fixed Cost per Month Cost per Car Washed $0.80 $ 1,100 $ 4,500 $ 8,100 $ 1,900 $ 1,700 Cleaning supplies Electricity Maintenance Wages and salaries. Depreciation Administrative expenses Rent $ 0.03 For example, electricity costs should be $1,100 per month plus $0.09 per car washed. The company expects to wash 8,400 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 Actual cars washed. Revenue Expenses: Cleaning supplies Electricity Maintenance Rent Wages and salaries Depreciation Administrative expenses. Total expense Net operating income 8,500 $ 52,500 7,220 1,826 2,760 8,220 $ 0.09 $0.30 $ 0.40 8,100 2,100 1,852 32,078 $ 20,422

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 is a Canadian company that 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 For example, electricity costs should be $1,100 per month plus $0.09 per car washed. The company expects to wash 8,400 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 Actual cars washed Revenue Expenses: For the Month Ended August 31 Cleaning supplies Electricity Maintenance Rent Wages and salaries. Depreciation Fixed Cost Cost per per Month Car Washed $0.80 $ 0.09 $ 1,100 $ 4,500 $ 8,100 $ 1,900 $ 1,700 Administrative expenses Total expense Net operating income 8,500 $ 52,500 $0.30 $ 0.40 7,220 1,826 2,760 8,220 8,100 2,100 1,852 32,078 $ 20,422 $ 0.03
Transcribed Image Text:Lavage Rapide is a Canadian company that 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 For example, electricity costs should be $1,100 per month plus $0.09 per car washed. The company expects to wash 8,400 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 Actual cars washed Revenue Expenses: For the Month Ended August 31 Cleaning supplies Electricity Maintenance Rent Wages and salaries. Depreciation Fixed Cost Cost per per Month Car Washed $0.80 $ 0.09 $ 1,100 $ 4,500 $ 8,100 $ 1,900 $ 1,700 Administrative expenses Total expense Net operating income 8,500 $ 52,500 $0.30 $ 0.40 7,220 1,826 2,760 8,220 8,100 2,100 1,852 32,078 $ 20,422 $ 0.03
Required: Prepare a flexible budget performance report that shows the company's revenue and spending variances and activity variances for August. (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 expense Net operating income Lavage Rapide Flexible Budget Performance Report For the Month Ended August 31 Actual Results 8,500 S 52,500 S 7,220 1,826 2,760 8,220 8,100 2,100 1,852 32,078 20,422 Flexible Budget Planning Budget
Transcribed Image Text:Required: Prepare a flexible budget performance report that shows the company's revenue and spending variances and activity variances for August. (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 expense Net operating income Lavage Rapide Flexible Budget Performance Report For the Month Ended August 31 Actual Results 8,500 S 52,500 S 7,220 1,826 2,760 8,220 8,100 2,100 1,852 32,078 20,422 Flexible Budget Planning Budget
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