Question

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 $ 0.50 Electricity $ 1,500 $ 0.05 Maintenance $ 0.25 Wages and salaries $ 4,400 $ 0.30 Depreciation $ 8,300 Rent $ 2,100 Administrative expenses $ 1,600 $ 0.03 For example, electricity costs are $1,500 per month plus $0.05 per car washed. The company expects to wash 8,200 cars in August and to collect an average of $6.90 per car washed. The actual operating results for August appear below. Lavage Rapide Income Statement For the Month Ended August 31 Actual cars washed 8,300 Revenue $ 58,680 Expenses: Cleaning supplies 4,600 Electricity 1,880 Maintenance 2,290 Wages and salaries 7,220 Depreciation 8,300 Rent 2,300 Administrative expenses 1,746 Total expense 28,336 Net operating income $ 30,344 Required: Complete the flexible budget performance report that shows the company’s activity variances and 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.)

Answer 1