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 $ 0.50 Electricity $ 1,200 $ 0.09 Maintenance $ 0.20 Wages and salaries $ 4,800 $ 0.40 Depreciation $ 8,300 Rent $ 2,000 Administrative expenses $ 1,500 $ 0.01 For example, electricity costs are $1,200 per month plus $0.09 per car washed. The company expects to wash 8,300 cars in August and to collect an average of $6.90 per car washed. Required: Prepare the company’s planning budget for August

Answer 1

Lavage Rapide
Planning Budget
Particulars	Amount
Revenue (8,300 cars x $6.90 per car)	$57,270
Expenses:
Cleaning supplies (8,300 cars x $0.50 per car)	$4,150
Electricity ($1,200 + 8,300 cars x $0.09 per car)	$1,947
Maintenance (8,300 cars x $0.20 per car)	$1,660
Wages and salaries ($4,800 + 8,300 cars x $0.40 per car)	$8,120
Depreciation	$8,300
Rent	$2,000
Administrative expenses ($1,500 + 8,300 cars x $0.01 per car)	$1,583
Total expense	$27,760
Net operating income (Revenue - Total expense)	$29,510