Lavage Rapide 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 Wages and salaries Depreciation Rent Administrative expenses Fixed Cost per Month Cost per Car Washed $ 0.50 $ 1,100 $ 0.06 $ 0.15 $ 5,000 $ 0.30 $ 8,200 $ 1,900 $1,400 $ 0.05 For example, electricity costs should be $1,100 per month plus $0.06 per car washed. The company expects to wash 8,500 cars in August and to collect an average of $6.80 per car washed. The company actually washed 8,600 cars in August. Required: Calculate the company's activity variances for August. 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. Lavage Rapide Activity Variances For the Month Ended August 31 Revenue $ 58,480 None Expenses: Cleaning supplies 4,300 F Electricity 1,010 F Maintenance 1,290 F Wages and salaries 7,580 F Depreciation 8,200 F Rent 1,900 F Administrative expenses 1,830 F Total expenses Net operating income 26,716 F $ 31,764 None
Lavage Rapide 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 Wages and salaries Depreciation Rent Administrative expenses Fixed Cost per Month Cost per Car Washed $ 0.50 $ 1,100 $ 0.06 $ 0.15 $ 5,000 $ 0.30 $ 8,200 $ 1,900 $1,400 $ 0.05 For example, electricity costs should be $1,100 per month plus $0.06 per car washed. The company expects to wash 8,500 cars in August and to collect an average of $6.80 per car washed. The company actually washed 8,600 cars in August. Required: Calculate the company's activity variances for August. 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. Lavage Rapide Activity Variances For the Month Ended August 31 Revenue $ 58,480 None Expenses: Cleaning supplies 4,300 F Electricity 1,010 F Maintenance 1,290 F Wages and salaries 7,580 F Depreciation 8,200 F Rent 1,900 F Administrative expenses 1,830 F Total expenses Net operating income 26,716 F $ 31,764 None
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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