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: Fixed Cost Cost per Car per Month Washed Cleaning supplies Electricity Maintenance $ 0. 60 $ 0.08 $ 0. 25 $ 0. 20 $ 1,300 $ 4,400 $ 8,100 $ 1,900 $ 1,600 Wages and salaries Depreciation Rent Administrative expenses $ 0.03 For example, electricity costs should be $1,300 per month plus $0.08 per car washed. The company expects to wash 8,100 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 8,200 $ 54,750 Revenue Expenses: cleaning supplies Electricity Maintenance 5,360 1,918 2,265 Wages and salaries Depreciation Rent 6,380 8,100 2,100 1,743 27,866 Administrative expenses Total expense Net operating income $ 26,884 Required: Prepare a flexible budget performance report that shows the company's revenue and spending variances and activity variances for August. (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.)
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: Fixed Cost Cost per Car per Month Washed Cleaning supplies Electricity Maintenance $ 0. 60 $ 0.08 $ 0. 25 $ 0. 20 $ 1,300 $ 4,400 $ 8,100 $ 1,900 $ 1,600 Wages and salaries Depreciation Rent Administrative expenses $ 0.03 For example, electricity costs should be $1,300 per month plus $0.08 per car washed. The company expects to wash 8,100 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 8,200 $ 54,750 Revenue Expenses: cleaning supplies Electricity Maintenance 5,360 1,918 2,265 Wages and salaries Depreciation Rent 6,380 8,100 2,100 1,743 27,866 Administrative expenses Total expense Net operating income $ 26,884 Required: Prepare a flexible budget performance report that shows the company's revenue and spending variances and activity variances for August. (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.)
Chapter2: Building Blocks Of Managerial Accounting
Section: Chapter Questions
Problem 4EA: Hicks Contracting collects and analyzes cost data in order to track the cost of installing decks on...
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