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 Month			Cost per Car Washed
Cleaning supplies				$	0.80
Electricity	$	1,200		$	0.09
Maintenance				$	0.25
Wages and salaries	$	4,900		$	0.30
Depreciation	$	8,300
Rent	$	1,900
Administrative expenses	$	1,800		$	0.02

For example, electricity costs are $1,200 per month plus $0.09 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
Actual cars washed		8,200
Revenue	$	50,700
Expenses:
Cleaning supplies		6,980
Electricity		1,899
Maintenance		2,265
Wages and salaries		7,690
Depreciation		8,300
Rent		2,100
Administrative expenses		1,862
Total expense		31,096
Net operating income	$	19,604

Required:

Calculate the company's revenue and spending 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. Do not round intermediate calculations.)

Answer 1