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 $ 0.70 Electricity $ 1,400 $ 0.09 Maintenance $ 0.20 Wages and salaries $ 4,400 $ 0.30 Depreciation $ 8,200 Rent $ 1,900 Administrative expenses $ 1,400 $ 0.02 For example, electricity costs are $1,400 per month plus $0.09 per car washed. The company expects to wash 8,300 cars in August and to collect an average of $6.80 per car washed.

Required:

Prepare the company’s planning budget for August.

Answer 1

Lavage Rapide
Planning Budget
For the month of August 31
Revenue	$ 56,440
Expenses:
Cleaning Supplies	$   5810
Electricity	$   2147
Maintenance	$   1660
Wages and Salaries	$   6890
Depreciation	$   8200
Rent	$   1900
Administrative Expenses	$   1566
Total Expenses	$ 28173
Net Operating Income	$ 28267