Question

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 MonthCost per
Car Washed

Cleaning supplies   $0.50

Electricity$1,100 $0.09

Maintenance   $0.20

Wages and salaries$4,500 $0.30

Depreciation$8,300   

Rent$1,900   

Administrative expenses$1,700 $0.04

For example, electricity costs are $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 $6.30 per car washed.
Required:

Prepare the company’s planning budget for August.

Answer 1

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