Alpesh Lavage Rapide owns and operates a large automatic car wash facility near Montreal. The following table provides estimatesconcerning the company's costs:Cleaning suppliesElectricityMaintenanceWages and salariesDepreciationRentAdministrative expensesFor 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 $6.50 per car washed.The actual operating results for August are as follows:Lavage RapideIncome StatementFor the Month Ended August 31Actual cars washedRevenueExpenses:Cleaning suppliesElectricityMaintenanceFixedMonthCost per Cost perCar Washed$ 0.60$ 0.07$ 0.15$0.30$1,400$ 4,800$ 8,200$ 2,200$1,300Wages and salariesDepreciationRentAdministrative expensesTotal expensesNet operating income8,200$ 54,750$ 0.035,3601,9371,4557,5908,2002,4001,44328,385$ 26,365Required:Calculate the company's revenue and spending 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., zerovariance). Input all amounts as positive values.

Variances are the differences between the actual values and budgeted values. If the budgeted values…

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 Actual cars washed Revenue Expenses: 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 $6.50 per car washed. The actual operating results for August are as follows: Lavage Rapide Income Statement For the Month Ended August 31 Cleaning supplies Electricity Maintenance Wages and salaries Depreciation Rent Fixed Cost per Cost per Month Car Washed $0.60 $ 1,400 $4,000 $ 8,200 $2,200 $1,300 Administrative expenses Total expenses Net operating income 8,200 $ 54,750 5,360 1,937 1,455 7,590 8,200 2,400 1,443 $ 0.07 $ 0.15 $ 0.30 28,385 $ 26,365 $ 0.03 Required: Calculate the company's revenue and spending variances for August. Note: Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (ie, zero variance). Input all amounts as positive values.

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 Actual cars washed Revenue Expenses: 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 $6.50 per car washed. The actual operating results for August are as follows: Lavage Rapide Income Statement For the Month Ended August 31 Cleaning supplies Electricity Maintenance Wages and salaries Depreciation Rent Fixed Cost per Cost per Month Car Washed $0.60 $ 1,400 $4,000 $ 8,200 $2,200 $1,300 Administrative expenses Total expenses Net operating income 8,200 $ 54,750 5,360 1,937 1,455 7,590 8,200 2,400 1,443 $ 0.07 $ 0.15 $ 0.30 28,385 $ 26,365 $ 0.03 Required: Calculate the company's revenue and spending variances for August. Note: Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (ie, zero variance). Input all amounts as positive values.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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