Hansaben Lavage Rapide is a Canadian company that owns and operates a large automatic car wash facility nearMontreal. The following table provides estimates concerning the company's costs:FixedCost perMonthCost perCar WashedCleaning supplies$ 0.50Electricity$ 1,400$ 0.10Maintenance$ 0.30Wages and salaries$ 4,500$ 0.30Depreciation$ 8,500Rent$ 2,200Administrative expenses$ 1,600$ 0.02For example, electricity costs should be $1,400 per month plus $0.10 per car washed. The company actuallywashed 8,200 cars in August and collected an average of $6.50 per car washed.Required:Prepare the company's flexible budget for August.Lavage RapideFlexible BudgetFor the Month Ended August 31RevenueExpenses:Cleaning suppliesElectricityMaintenanceWages and salariesDepreciationRentAdministrative expensesTotal expenseNet operating income

Lavage RapideFlexible BudgetFor the month Ended August 31 (8,200 Cars)ParticularsAmount Revenue $…

Answered: Lavage Rapide is a Canadian company…

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter6: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 1PB: Classify costs Cromwell Furniture Company manufactures sofas for distribution to several major...

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Hicks Contracting collects and analyzes cost data in order to track the cost of installing decks on new home construction jobs. The following are some of the costs that they incur. Classify these costs as fixed or variable costs and as product or period costs. Lumber used to construct decks ($12.00 per square foot) Carpenter labor used to construct decks ($10 per hour) Construction supervisor salary ($45,000 per year) Depreciation on tools and equipment ($6,000 per year) Selling and administrative expenses ($35,000 per year) Rent on corporate office space ($34,000 per year) Nails, glue, and other materials required to construct deck (varies per job)
Roper Furniture manufactures office furniture and tracks cost data across their process. The following are some of the costs that they incur. Classify these costs as fixed or variable costs, and as product costs or period costs. Wood used to produce desks ($125,00 per desk) Production labor used to produce desks ($15 per hour) Production supervisor salary ($45,000 per year) Depreciation on factory equipment ($60,000 per year) Selling and administrative expenses ($45,000 per year) Rent on corporate office ($44,000 per year) Nails, glue, and other materials required to produce desks (varies per desk) Utilities expenses for production facility Sales staff commission (5% of gross sales)
Lavage Rapide is a Canadian company that owns and operates a large automatic car wash facility near Montreal. The following table provides estimates concerning the company's costs: cleaning supplies Electricity Maintenance Mages and salaries Depreciation Rent Administrative expenses For example, electricity costs should be $1,200 per month plus $0.10 per car washed. The company expects to wash 8,300 cars in August and to collect an average of $6.50 per car washed. The actual operating results for August are as follows: Lavage Rapide Income Statement For the Month Ended August 31 Actual cars washed Revenue Expenses Cleaning supplies Electricity Maintenance Wages and salaries Depreciation Fixed Cost per Month $1,200 $ 4,400 $8,100 $ 2,100 $1,800 Rent Administrative expenses Total expense Bet operating income Cost per Car Washed $0.80 $0.10 $ 0.20 $0.30 8,400 $56,050 7,140 2,000 1,900 7,250 0,100 2,300 2,032 30,722 $ 25,328 $ 0.04 Required: Calculate the company's revenue and spending…
Jake's Roof Repair provided the following data concerning its costs: Fixed Cost Cost per per Month Repair-Hour Wages and salaries Parts and supplies Equipment depreciation $ 21,200 $ 15.00 $ 7.10 $ 2,770 $ 0.45 Truck operating expenses Rent $ 5,720 $ 1.60 $ 4,640 $ 3,880 $ 0.50 Administrative expenses For example, wages and salaries should be $21,200 plus $15.00 per repair-hour. The company expected to work 2,800 repair-hours in May but actually worked 2,700 repair-hours. The company expects its sales to be $54.00 per repair-hour. Required: Compute the company's activity variances for May. Note: 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. Revenue Expenses: Jake's Roof Repair Activity Variances For the Month Ended May 31 Wages and salaries Parts and supplies Equipment depreciation Truck operating expenses Rent Administrative expenses Total expenses Net…
Keller Company, a manufacturer of rivets, uses absorption costing Keller’s manufacturing costs were as follows: Direct materials and direct labor $800,000 Depreciation of machines 100,000 Rent for factory building 60,000 Electricity to run machine 35,000 How much of these costs should be inventoried? $800,000 $835,000 $935,000 $995,000
Lavage Rapide is a Canadian company that owns and operates a large automatic carwash facility nearMontreal. The following table provides data concerning the company’s costs:Fixed Cost Cost per Carper Month WashedCleaning supplies ...................... $0.80Electricity .................................. $1,200 $0.15Maintenance ............................ $0.20Wages and salaries ................. $5,000 $0.30Depreciation .............................. $6,000Rent .......................................... $8,000Administrative expenses .......... $4,000 $0.10For example, electricity costs are $1,200 per month plus $0.15 per car washed. The company expects towash 9,000 cars in August and to collect an average of $4.90 per car washed.Required:Prepare the company’s planning budget for August.
Arctic Air Inc. manufactures cooling units for commercial buildings. The price and cost of goods sold for each unit are as follows: Category Per Unit Dollar Amount Price $60,000 Cost of goods sold Gross profit 28,000 32,000 In addition, the company incurs selling and administrative expenses of $226,250. The company wishes to assign these costs to its three major customers, Gough Industries, Breen Inc., and The Martin Group. These expenses are related to three major nonmanufacturing activities: customer service, project bidding, and engineering support. The engineering support is in the form of engineering changes that are placed by the customer to change the design of a product. The budgeted activity costs and activity bases associated with these activities are: Budgeted Activity Cost Activity Base $51,500 Number of service requests Activity Customer service Project bidding Engineering support 64,000 Number of bids 110,500 Number of customer design changes Total costs 226,000…
I b) Refer to the following data: Direct material used $180 000 Advertising costs $ 5 000 Indirect labour $ 8 000 Rent on corporate office $ 20 000 Depreciation on factory equipment $ 60 000 Direct labour $ 30 000 Factory cleaners wages $ 20 000 Indirect materials $ 35 000 Required (show your workings for each question): Determine each of the following costs: (list the costs under each cost category when calculating the answer). Period costs
Which of the following costs is a mixed cost? a.straight-line depreciation on factory equipment b.electricity costs of $3 per kilowatt-hour c.salary of a factory supervisor d.rental costs of $10,000 per month plus $0.30 per machine hour of use
b) Refer to the following data: Direct material used $180 000 Advertising costs $ 5 000 Indirect labour $ 8 000 Rent on corporate office $ 20 000 Depreciation on factory equipment $ 60 000 Direct labour $ 30 000 Factory cleaners wages $ 20 000 Indirect materials $ 35 000 Required (show your workings for each question): Determine each of the following costs: (list the costs under each cost category when calculating the answer). Product costs
Steuben Company produces dog houses. During the current year, Steuben Company incurred the following costs: Rent on manufacturing facility $ 250,000 Office manager's salary 150,000 Wages of factory machine operators 110,000 Depreciation on manufacturing equipment 50,000 Insurance and taxes on selling and administrative offices 30,000 Direct materials purchased and used 170,000 Based on the above information, the amount of period costs shown on Steuben's income statement is: Multiple Choice $150,000. $180,000. $430,000. S 30,000.
How would each of the following costs be classified if units produced is the activity base? a. Salary of factory supervisor ($120,000 per year) b. Straight-line depreciation of plant and equipment c. Property rent of $11,500 per month on plant and equipment

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