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 $0.60 $e.08 se.30 $0.20 per Month Cleaning supplies Electricity Maintenance $1, 20e Wages and salaries Depreciation Rent $4,50e $8, 200 $1,80e $1,40e Administrative expenses s8.81 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 8,480 $ 54,390 Revenue Expenses: Cleaning supplies Electricity 5,480 1,834 2,730 6,520 8, 280 2,eee 1, 383 28,147 Maintenance Wages and salaries Depreciation Rent Administrative expenses Total expense Net operating income 26,243 Required: Prepare a flexible budget performance report that shows the company's revenue and spending variances and activity variances for August. (Indleate the effect of each variance by selecting "F" for favorable, "u" for unfavorable, and "None" for no effect (le., zero variance). Input all amounts as positive values.) Lavage Rapide Flexible Budget Performance Report For the Month Ended August 31 Actual Flexible Planning Budget Results Budget Cars washed 8,400 54,390 Revenue S Expenses Cleaning supplies 5,480

Answer 1

Answer-

LAVAGE RAPIDE
FLEXIBLE BUDGET PERFORMANCE REPORT
FOR THE MONTH ENDED AUGUST 31
PARTICULARS	REVENUE & SPENDING VARIANCE	REMARK	ACTIVITY VARIANCE	REMARK
	$		$
Revenue	1470	Favorable	630	Favorable
Less:-Expenses
Cleaning expenses	-440	Unfavorable	-60	Unfavorable
Electricity	38	Favorable	-8	Unfavorable
Maintenance	-210	Unfavorable	-30	Unfavorable
Wages & salaries	-340	Unfavorable	-20	Unfavorable
Depreciation	0	None	0	None
Rent	-200	Unfavorable	0	None
Administrative expenses	101	Favorable	-1	Unfavorable
Total Expenses	-1051	Unfavorable	-119	Unfavorable
Income from operations	419	Favorable	511	Favorable

Explanation-

Lavage Rapide
Activity Variance
For the month ended August 31
Particulars	Planning Budget	Flexible Budget	Variances	Remark
	$	$	$
Revenue	8300 car washed*$6.30 per car washed=$52290	52920	630	Favorable
Less:-Expenses
Cleaning expenses	8300 car washed*$0.60 per car washed= 4980	5040	-60	Unfavorable
Electricity	(8300 car washed*$0.08 per car washed)+$1200 =1864	1872	-8	Unfavorable
Maintenance	8300 car washed*$0.30 per car washed =2490	2520	-30	Unfavorable
Wages & salaries	(8300 car washed*$0.20 per car washed)+$4500 =6160	6180	-20	Unfavorable
Depreciation	8200	8200	0	None
Rent	1800	1800	0	None
Administrative expenses	(8300 car washed*$0.01 per car washed)+$1400 =1483	1484	-1	Unfavorable
Total Expenses	26977	27096	-119	Unfavorable
Income from operations	25313	25824	511	Favorable
Lavage Rapide
Revenue & Spending Variances
For the month ended August 31
Particulars		Flexible Budget	Actual Results	Variances	Remark
		$	$	$
Revenue	8400 car washed*$6.30 per car washed	52920	54390	1470	Favorable
Less:-Expenses
Cleaning expenses	8400 car washed*$0.60 per car washed	5040	5480	-440	Unfavorable
Electricity	(8400 car washed*$0.08 per car washed)+$1200	1872	1834	38	Favorable
Maintenance	8400 car washed*$0.30 per car washed	2520	2730	-210	Unfavorable
Wages & salaries	(8400 car washed*$0.20 per car washed)+$4500	6180	6520	-340	Unfavorable
Depreciation		8200	8200	0	None
Rent		1800	2000	-200	Unfavorable
Administrative expenses	(8400 car washed*$0.01 per car washed)+$1400	1484	1383	101	Favorable
Total expenses		27096	28147	-1051	Unfavorable
Income from operations		25824	26243	419	Favorable