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's expected costs: Fixed Cost per Month Cost per Car Washed Cleaning supplies $0.90 Electricity Maintenance $ 3,450 0.30 0.50 Wages and salaries 6,600 0.60 Depreciation Rent Administrative expenses 10,200 4,000 3,740 0.07 For example, electricity costs are $3,450 per month plus $0.30 per car washed. The company expects to wash 9,900 cars in October and to collect an average of $7.80 per car washed. Auto Lavage's actual level of activity was 10,000 cars. The actual revenues and expenses for October are given below: Auto Lavage Income Statement For the Month Ended October 31 Actual cars washed 10,000 Sales $79,900 Variable expenses: Cleaning supplies 9,850 Electricity 3,082 Maintenance 4,525 Wages and salaries 6,250 Administrative 790 Fixed expenses: Electricity 3,540 Wages and salaries 6,600 Depreciation 10,200 Rent 4,000 Administrative 3,645 Total expense 52,482 Net operating income $27,418 Required: 1. Prepare a flexible budget performance report for October. (Indicate the effect of each variance by selecting "F" for favourable, "U" for unfavourable, and "None" for no effect (i.e., zero variance).) Sales Variable Expenses: AUTO LAVAGE INC. Flexible Budget Performance Report For the Month Ended October 31 Cost Formula (per car) $ Actual Flexible Budget Flexible Budget Variance 7.80 $ 79,900 $ 78,000 $1,900 F Cleaning supplies 0.90 9,850 9,000 850 U Electricity 0.30 3,082 3,000 82 U Maintenance 0.50 4,525 5,000 475 F Wages and salaries 0.60 6,250 6,000 250 U Administrative 0.07 790 700 90 U Total variable expenses 2.37 24,497 23,700 Contribution margin 5.43 55,403 54,300 Fixed expenses: Electricity Wages and salaries Depreciation Rent Administrative Total fixed expenses Operating income 0 0 $ 55,403 $ 54,300 2. Prepare a comprehensive performance report for October. Assume that the static budget for October was based on an activity level of 9,900 cars. (Indicate the effect of each variance by selecting "F" for favourable, "U" for unfavourable, and "None" for no effect (i.e., zero variance).) Number of cars Variable Expenses: AUTO LAVAGE INC. Comprehensive Performance Report For the Month Ended October 31 Flexible Budget Actual 10,000 Variance Flexible Budget Sales Volume Variance Static Budget 10,000 9,900 Total variable expenses 0 0 0 0 0 0 Fixed expenses: Total fixed expenses 0 0 0 $ 0 $ 0 $ 0