Question

Exercise 8-8 Flexible Budget [LO8-1]

Lavage Rapide is a Canadian company that owns and operates a large automatic carwash 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	$	1,100		$	0.07
Maintenance				$	0.10
Wages and salaries	$	4,200		$	0.30
Depreciation	$	8,100
Rent	$	2,200
Administrative expenses	$	1,300		$	0.03

For example, electricity costs are $1,100 per month plus $0.07 per car washed. The company actually washed 8,500 cars in August and expects to collect an average of $6.80 per car washed.

Required:

Complete the company’s flexible budget for August.

Answer 1