Lavage Rapide is a Canadian company that owns and operates a large automatic car wash facility near Montreal. The following tableprovides estimates concerning the company's costs:FixedCost perMonthCost perCar WashedCleaning supplies$ 0.60Electricity$ 1,400$ 0.07Maintenance$ 0.15Wages and salaries$ 4,600$ 0.20Depreciation$ 8,200Rent$ 2,000Administrative expenses$ 1,400$ 0.02For example, electricity costs should be $1,400 per month plus $0.07 per car washed. The company expects to wash 8,100 cars inAugust and to collect an average of $6.40 per car washed. The company actually washed 8,200 cars in August.Required:Calculate the company's activity variances for August. (Indicate the effect of each variance by selecting "F" for favorable, "U" forunfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.)Lavage RapideActivity VariancesFor the Month Ended August 31RevenueExpenses:Cleaning suppliesElectricityMaintenanceWages and salariesDepreciationRentAdministrative expensesTotal expenseNet operating income

Every spending variation should be compared to the assumptions that were utilized to create the…

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 Fixed Cost per Month $ 1.400 Cost per Car Washed $ 0.60 $0.07

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 Fixed Cost per Month $ 1.400 Cost per Car Washed $ 0.60 $0.07

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

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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Concept explainers

Manufacturing Costs

Manufacturing cost is the total cost of procuring or producing a product. In other words, the manufacturing cost is the cost that an individual or business owner undertakes for the manufacturing of goods.

Question

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 per
Month
Cost per
Car Washed
Cleaning supplies
$ 0.60
Electricity
$ 1,400
$ 0.07
Maintenance
$ 0.15
Wages and salaries
$ 4,600
$ 0.20
Depreciation
$ 8,200
Rent
$ 2,000
Administrative expenses
$ 1,400
$ 0.02
For example, electricity costs should be $1,400 per month plus $0.07 per car washed. The company expects to wash 8,100 cars in
August and to collect an average of $6.40 per car washed. The company actually washed 8,200 cars in August.
Required:
Calculate the company's 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
Activity Variances
For the Month Ended August 31
Revenue
Expenses:
Cleaning supplies
Electricity
Maintenance
Wages and salaries
Depreciation
Rent
Administrative expenses
Total expense
Net operating income

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