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: cleaning supplies Electricity Maintenance Wages and salaries Depreciation Rent Administrative expenses Fixed Cost per Month $1,500 $4,600 $8,400 $2,100 $1,700 Cost per Car Washed $0.60 $0.08 $ 0.25 $0.40 $0.00 For example, electricity costs are $1.500 per month plus $0.08 per car washed. The company actually washed 8,500 cars in August and collected an average of $6.80 per car washed, Required: Prepare the company's flexible budget for August.

Answer 1

Lavage Rapide
Flexible Budget
For the Month Ended August 31
Actual Cars washed	8,500
Revenue (8,500 cars x $6.80)	$                           57,800
Expenses:
Cleaning Supplies (8,500 cars x $0.60)	5,100
Electricity [$1,500 + (8,500 cars x $0.08)]	2,180
Maintenance (8,500 cars x $0.25)	2,125
Wages and Salaries [$4,600 + (8,500 cars x $0.40)]	8,000
Depreciation	8,400
Rent	2,100
Administrative Expenses [$1,700 + (8,500 cars x $0.01)]	1,785
Total Expense	29,690
Net Operating Income	$                           28,110