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	$	1,300		$	0.07
Maintenance				$	0.25
Wages and salaries	$	4,400		$	0.40
Depreciation	$	8,100
Rent	$	2,100
Administrative expenses	$	1,800		$	0.02

For example, electricity costs are $1,300 per month plus $0.07 per car washed. The company expects to wash 8,100 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