1. 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:
Fixed Cost per Month Cost per Car Washed
Cleaning supplies $ 0.60
Electricity $ 1,300 $ 0.08
Maintenance $ 0.10
Wages and salaries $ 4,400 $ 0.30
Depreciation $ 8,200 Rent $ 1,900 Administrative expenses $ 1,400 $ 0.04
For example, electricity costs are $1,300 per month plus $0.08 per car washed. The company expects to wash 8,300 cars in August and to collect an average of $5.90 per car washed.
Required:
Prepare the company’s planning budget for August.
5. 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:
Fixed Cost per Month Cost per Car Washed
Cleaning supplies $ 0.50
Electricity $ 1,200 $ 0.05
Maintenance $ 0.20
Wages and salaries $ 4,800 $ 0.40
Depreciation $ 8,200 Rent $ 1,800 Administrative expenses $ 1,600 $ 0.04
For example, electricity costs are $1,200 per month plus $0.05 per car washed. The company actually washed 8,400 cars in August and collected an average of $6.40 per car washed.
Required:
Prepare the company’s flexible budget for August.
3. 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:
Fixed Cost per Month Cost per Car Washed
Cleaning supplies $ 0.50
Electricity $ 1,400 $ 0.06
Maintenance $ 0.25
Wages and salaries $ 4,700 $ 0.40
Depreciation $ 8,100 Rent $ 1,800 Administrative expenses $ 1,800 $ 0.05
For example, electricity costs are $1,400 per month plus $0.06 per car washed. The company expects to wash 8,000 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 8,100
Revenue $ 50,100
Expenses: Cleaning supplies 4,500
Electricity 1,850
Maintenance 2,240
Wages and salaries 8,260
Depreciation 8,100
Rent 2,000
Administrative expenses 2,100
Total expense 29,050
Net operating income $ 21,050
Required:
Calculate the company's revenue and spending variances for August.