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	$	1,100		$	0.08
Maintenance				$	0.20
Wages and salaries	$	4,700		$	0.40
Depreciation	$	8,200
Rent	$	2,000
Administrative expenses	$	1,800		$	0.03

For example, electricity costs are $1,100 per month plus $0.08 per car washed. The company actually washed 8,300 cars in August and collected an average of $6.50 per car washed.

Required:

Prepare the company’s flexible budget for August.

Answer 1