Auto Lavage is a Canadian company that owns and operates a large automatic car wash facility near Quebec. The following table provides data concerning the company's costs:

The company expects to charge customers an average of $5.90 per car washed.

Required:

Using Exhibit 9-3 as your guide, prepare a flexible budget for October assuming either 8,000 or 9,000 cars are washed.

Exhibit 9-3

*Per unit amount as per Schedule 6

Schedule 6

*variable overhead cost per hour (Schedule 5) multiplied by direct labour-hours per unit (Schedule 6): $2 × 0.5 = $1.00.

Schedule 5

† Per unit amount as per Schedule 7.

Schedule 7

**Total budgeted fixed overhead expense as per Schedule 5.

**Total budgeted fixed selling and administrative expenses as per Schedule 7.

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Fixed Cost Cost per Car Washed per Month $0.70 Cleaning supplies Electricity . $1,400 0.10 Maintenance 0.30 Wages and salaries Depreciation 4,700 0.40 8,300 Rent... 2,100 Administrative expenses 1,800 0.05 PATTERSON FRAMING LIMITED Flexible Budget For the Year Ending December 31, 2018 Budgeted Amount Sales in Units per Unit 180,000 200,000 220,000 Sales $30.00 $5,400,000 $6,000,000 $6,600,000 Less variable expenses: Direct materials* 4.00 720,000 800,000 880,000 Direct labour* Variable manufacturing overhead" Selling and administrative Total variable expenses . Contribution margin Less fixed expenses: 2,200,000 220,000 440,000 10.00 1,800,000 180,000 360,000 2,000,000 200,000 400,000 3,400,000 2,600,000 1.00 2.00 3,060,000 2,340,000 3,740,000 2,860,000 17.00 $13.00 Manufacturing overhead** Selling and administrative## Total fixed expenses Operating income 1,005,000 1,005,000 408,000 1,413,000 $1,187,000 1,005,000 408,000 408,000 1,413,000 $ 927,000 1,413,000 $1,447,000