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 $1,500 Cleaning supplies Electricity Maintenance Wages and salaries Depreciation Rent Administrative expenses Cost per Car Washed $0.40 $0.09 $0.10 $0.40 $4,000 $8,100 $2.100 $1.800 $0.04 For example, electricity costs are $1,500 per month plus $0.09 per car washed. The company expects to wash 8,200 cars in August and to collect an average of $6.00 per car washed. The actual operating results for August appear below. Lavage Rapide Income Statement For the Month Ended August 31 Retual cars washed 8,300 $ 51,300 Revenue Expenses: Cleaning supplies Electricity Maintenance Wages and salaries Depreciation Rent Administrative expenses Total expense Net operating income 3,780 2,200 1,060 1.640 8.100 2.300 2,028 $ 24,184

Answer 1

Flexible budget performance report

	Actual results	Revenue and spending variance	Flexible budget	Activity variance	Planning budget
Car washed	8300		8300		8200
Revenue	51300	1500 F	49800	600 F	49200
Expenses
Cleaning supplies	3780	460 U	3320	40 U	3280
Electricity	2208	39 F	2247	9 U	2238
Maintenance	1060	230 U	830	10 U	820
Wages and salaries	7640	320 U	7320	40 U	7280
Depreciation	8100	0 None	8100	0 None	8100
Rent	2300	200 U	2100	0 None	2100
Administrative expenses	2028	104 F	2132	4 U	2128
Total expense	27116	1067 U	26049	103 U	25946
Net operating income	24184	433 F	23751	497 F	23254