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 $ 0.40 $ 0.08 $ 0.25 $ 0.40 cleaning supplies Electricity Maintenance Wages and salaries Depreciation Rent Administrative expenses $1,200 $4,100 $ 8,400 $2,100 $1,700 $ 0.02 For example, electricity costs are $1,200 per month plus $0.08 per car washed. The company actually washed 8,200 cars in August and collected an average of $6.10 per car washed.

Answer 1

Solution

Lavage Rapide
Flexible Budget
For the Month Ended August 31
Actual car washed	8,200
Revenue	$   50,020.00
Expenses:
Cleaning supplies	$     3,280.00
Electricity	$     1,856.00
Maintenance	$     2,050.00
Wages and salaries	$     7,380.00
Depreciation	$     8,400.00
Rent	$     2,100.00
Administrative expenses	$     1,864.00
Total expense	$   26,930.00
Net Operating income	$ 23,090.00

Working

	Units (A)	Fixed cost (B)	Variable cost per unit ©	Flexible cost and revenue (D=(A x C) +B)
Revenue	8200		$       6.10	$ 50,020.00
Expenses:	8200
Cleaning suplies	8200	$               -	$       0.40	$    3,280.00
Electricity	8200	$ 1,200.00	$       0.08	$    1,856.00
Maintenance	8200	$               -	$       0.25	$    2,050.00
Wages and salaries	8200	$ 4,100.00	$       0.40	$    7,380.00
Depreciation	8200	$ 8,400.00		$    8,400.00
Rent	8200	$ 2,100.00		$    2,100.00
Administrative expenses	8200	$ 1,700.00	$       0.02	$    1,864.00
Total Expenses				$ 26,930.00
Net Operating Income				$ 23,090.00