Question

Exercise 9-12 Activity Variances (LO9-2] 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 $0.50 $0.09 $0.10 $0.30 Cleaning supplies Electricity Maintenance Wages and salaries Depreciation Rent Administrative expenses $1,000 $4,700 $8,500 $2,000 $1,300 $0.05 For example, electricity costs are $1,000 per month plus $0.09 per car washed. The company expects to wash 8,400 cars in August and to collect an average of $6.20 per car washed. The company actually washed 8,500 cars in August. Required: Calculate the company's activity 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.) Lavage Rapide Activity Variances For the Month Ended August 31 Revenue Expenses: Cleaning supplies Electricity Maintenance Wages and salaries Depreciation Rent Administrative expenses Total expense Net operating income

Answer 1

Revenue	620 F
Expenses
Cleaning supplies	50 U
Electricity	9 U
Maintenance	10 U
Wages and salaries	30 U
Depreciation	0 None
Rent	0 None
Administrative expenses	5 U
Total expense	104 U
Net operating income	516 F