Question

Exercise 9-14 Prepare a Flexible Budget Performance Report [LO9-4) 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 Cost per Car Washed Se.68 $0.08 $0.30 $9.29 Cleaning supplies Electricity Maintenance Wages and salaries Depreciation Rent Administrative expenses $1,200 $4,500 $8,200 $1.809 $1,409 $0.91 For example, electricity costs are $1,200 per month plus $0.08 per car washed. The company expects to wash 8,300 cars in August and to collect an average of $6.30 per car washed. The actual operating results for August appear below. Lavage Rapide Income Statement For the Month Ended August 31 Actual cars washed 8,482 $ 54,390 5.480 Revenue Expenses Cleaning supplies Electricity Maintenance Wages and salaries Depreciation Rent Administrative expenses Total expense Net operating income 1,834 2,23 6,520 8, 20e 2,eee 1,383 28,147 $ 26,243 Required: Prepare a flexible budget performance report that shows the company's revenue and spending variances and activity variances for August. (Indicate the effect of each varlance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (.e., zero varlance). Input all amounts as positive values.)

Answer 1

		Flexible budget variance
		Actual	Revenue and spending		Flexible	Activity variance		planned
		Result	variance		budget			budget
Cars washed		8,400			8,400			8,300
Revenue		54,390	1,470	F	52920	630	F	52290
Expenses
Cleaning supplies		5,480	440	U	5040	60	U	4980
Electricity		1,834	38	F	1872	8	U	1864
Maintenance		2,730	210	U	2520	30	U	2490
Wages and salaries		6,520	340	U	6180	20	U	6160
Depreciation		8,200	0	N	8,200	0	N	8,200
Rent		2,000	200	N	1,800	0	N	1,800
Administrative expenses		1,383	101	F	1,484	1	N	1,483
total expense		28,147	1,051	U	27,096	119	U	26,977
net operating income		26,243	419	F	25,824	511	F	25,313
	please don't put unfavorable variance in brackets