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 Cost per Car Washed Cleaning supplies $ 0.80 Electricity $ 1,500 $ 0.06 Maintenance $ 0.10 Wages and salaries $ 4,300 $ 0.40 Depreciation $ 8,400 Rent $ 1,900 Administrative expenses $ 1,800 $ 0.04 For example, electricity costs are $1,500 per month plus $0.06 per car washed. The company expects to wash 8,300 cars in August and to collect an average of $6.80 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 8,400 Revenue $ 58,540 Expenses: Cleaning supplies 7,140 Electricity 1,968 Maintenance 1,070 Wages and salaries 7,980 Depreciation 8,400 Rent 2,100 Administrative expenses 2,032 Total expense 30,690
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 Cost per Car Washed Cleaning supplies $ 0.80 Electricity $ 1,500 $ 0.06 Maintenance $ 0.10 Wages and salaries $ 4,300 $ 0.40 Depreciation $ 8,400 Rent $ 1,900 Administrative expenses $ 1,800 $ 0.04 For example, electricity costs are $1,500 per month plus $0.06 per car washed. The company expects to wash 8,300 cars in August and to collect an average of $6.80 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 8,400 Revenue $ 58,540 Expenses: Cleaning supplies 7,140 Electricity 1,968 Maintenance 1,070 Wages and salaries 7,980 Depreciation 8,400 Rent 2,100 Administrative expenses 2,032 Total expense 30,690
Chapter2: Building Blocks Of Managerial Accounting
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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 |
Cost per Car Washed |
|||||
Cleaning supplies | $ | 0.80 | ||||
Electricity | $ | 1,500 | $ | 0.06 | ||
Maintenance | $ | 0.10 | ||||
Wages and salaries | $ | 4,300 | $ | 0.40 | ||
Depreciation | $ | 8,400 | ||||
Rent | $ | 1,900 | ||||
Administrative expenses | $ | 1,800 | $ | 0.04 | ||
For example, electricity costs are $1,500 per month plus $0.06 per car washed. The company expects to wash 8,300 cars in August and to collect an average of $6.80 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 | 8,400 | |
Revenue | $ | 58,540 |
Expenses: | ||
Cleaning supplies | 7,140 | |
Electricity | 1,968 | |
Maintenance | 1,070 | |
Wages and salaries | 7,980 | |
Depreciation | 8,400 | |
Rent | 2,100 | |
Administrative expenses | 2,032 | |
Total expense | 30,690 | |
Net operating income | $ | 27,850 |
Required:
Calculate the company's revenue and spending 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.)
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