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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
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 Cost per Cleaning supplies per Month Car Washed Electricity $0.60 Maintenance $ 3, 250 0.20 Wages and salaries 0.40 Depreciation 6,400 0.50 Rent 10,000 3, 800 Administrative expenses 3, 520 0. 05 For example, electricity costs are $3,250 per month plus $0.20 per car washed. The company expects to wash 9,700 cars in October and to collect an average of $7.60 per car washed. Auto Lavage's actual level of activity was 9,800 cars. The actual revenues and expenses for October are given below: Auto Lavage 4 Income Statement For the Month Ended October 31 Actual cars washed 9 , 800 Sales $77, 600 Variable expenses: Cleaning supplies 6, 600 Electricity 2, 635 Maintenance 3, 500 Wages and salaries 5, 102 580 Administrative Fixed expenses : 2:27 PM
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