Question
Auto Lavage is a Canadian company that owns and operates a large automatic carwash facility near Quebec. The following table provides data concerning the company%u2019s
Auto Lavage is a Canadian company that owns and operates a large automatic carwash facility near Quebec. The following table provides data concerning the company%u2019s costs:
Fixed Cost per Month | Cost per Car Washed |
Cleaning supplies | $ | 0.70 | |||
Electricity | $ | 1,400 | $ | 0.10 | |
Maintenance | $ | 0.30 | |||
Wages and salaries | $ | 4,700 | $ | 0.40 | |
Depreciation | $ | 8,300 | |||
Rent | $ | 2,100 | |||
Administrative expenses | $ | 1,800 | $ | 0.05 | |
|
For example, electricity costs are $1,400 per month plus $0.10 per car washed. The company expects to wash 8,000 cars in October and to collect an average of $5.90 per car washed. |
The actual operating results for October appear below: |
Auto Lavage Income Statement For the Month Ended October 31 | ||
Actual cars washed | 8,100 | |
Revenue | $ | 49,300 |
| | |
Expenses: | ||
Cleaning supplies | 6,100 | |
Electricity | 2,170 | |
Maintenance | 2,640 | |
Wages and salaries | 8,260 | |
Depreciation | 8,300 | |
Rent | 2,300 | |
Administrative expenses | 2,100 | |
| ||
Total expense | 31,870 | |
| | |
Net operating income | $ | 17,430 |
| | |
|
Required: |
Compute the company's activity variances for October. (Input all amounts as positive values. Leave no cells blank - be certain to enter "0" wherever required. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Omit the "$" sign in your response.) |
Auto Lavage Activity Variances For the Month Ended October 31 | ||
Revenue | $ | |
| ||
Expenses: | ||
Cleaning supplies | ||
Electricity | ||
Maintenance | ||
Wages and salaries | ||
Depreciation | ||
Rent | ||
Administrative expenses | ||
| ||
Total expense | ||
| ||
Net operating income | $ |
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