Lavage Rapide is a Canadian company that owns and operates a large automatic car wash facility near Montreal. The following ta provides estimates concerning the company's costs: Fixed Cost Cost per Car Cleaning supplies Electricity Maintenance Wages and salaries Depreciation Rent Administrative expenses per Month Washed $ 0.80 $ 1,200 $ 0.15 $ 0.20 $ 5,000 $ 0.30 $ 6,000 $ 8,000 $ 4,000 $ 0.10 For example, electricity costs should be $1,200 per month plus $0.15 per car washed. The company expects to wash 9,000 cars in August and to collect an average of $4.90 per car washed. The company actually washed 8,800 cars in August. Required: Calculate the company's activity variances for August. (Indicate the effect of each variance by selecting "F" for favorable, "U" fo 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 $ 44,100 U Expenses: Cleaning supplies 7,200 F Electricity 2,550 F Maintenance 1,800 F Wages and salaries 7,700 F Depreciation 6,000 None Rent 8,000 None
Lavage Rapide is a Canadian company that owns and operates a large automatic car wash facility near Montreal. The following ta provides estimates concerning the company's costs: Fixed Cost Cost per Car Cleaning supplies Electricity Maintenance Wages and salaries Depreciation Rent Administrative expenses per Month Washed $ 0.80 $ 1,200 $ 0.15 $ 0.20 $ 5,000 $ 0.30 $ 6,000 $ 8,000 $ 4,000 $ 0.10 For example, electricity costs should be $1,200 per month plus $0.15 per car washed. The company expects to wash 9,000 cars in August and to collect an average of $4.90 per car washed. The company actually washed 8,800 cars in August. Required: Calculate the company's activity variances for August. (Indicate the effect of each variance by selecting "F" for favorable, "U" fo 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 $ 44,100 U Expenses: Cleaning supplies 7,200 F Electricity 2,550 F Maintenance 1,800 F Wages and salaries 7,700 F Depreciation 6,000 None Rent 8,000 None
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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 estimates concerning the company's costs: For example, electricity costs should be $1,200 per month plus $0.15 per car washed. The company expects to wash 9,000 cars in August and to collect an average of $4.90 per car washed. The company actually washed 8,800 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.)
Transcribed Image Text: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
Cleaning supplies
Electricity
Maintenance
Wages and salaries
Depreciation
Rent
Administrative expenses
per Month
Washed
$ 0.80
$ 1,200
$ 0.15
$ 0.20
$ 5,000
$ 0.30
$ 6,000
$ 8,000
$ 4,000
$ 0.10
For example, electricity costs should be $1,200 per month plus $0.15 per car washed. The company expects to wash 9,000 cars in
August and to collect an average of $4.90 per car washed. The company actually washed 8,800 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
$
44,100 U
Expenses:
Cleaning supplies
7,200 F
Electricity
2,550 F
Maintenance
1,800 F
Wages and salaries
7,700 F
Depreciation
6,000 None
Rent
8,000 None
Administrative expenses
4,900 F
Total expense
39,040 F
Net operating income
U
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