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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 companys

Auto Lavage is a Canadian company that owns and operates a large automatic carwash facility near Quebec. The following table provides data concerning the companys expected costs:

Fixed Cost per Month Cost per Car Washed
Cleaning supplies $ 0.60
Electricity $ 3,250 0.20
Maintenance 0.40
Wages and salaries 6,400 0.50
Depreciation 10,000
Rent 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 Lavages actual level of activity was 9,800 cars. The actual revenues and expenses for October are given below:

Auto Lavage Income Statement For the Month Ended October 31
Actual cars washed 9,800
Sales $ 77,600
Variable expenses:
Cleaning supplies 6,600
Electricity 2,035
Maintenance 3,500
Wages and salaries 5,102
Administrative 580
Fixed expenses:
Electricity 3,320
Wages and salaries 6,400
Depreciation 10,000
Rent 3,800
Administrative 3,445
Total expense 44,782
Net operating income $ 32,818

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).)

2. Prepare a comprehensive performance report for October. Assume that the static budget for October was based on an activity level of 9,700 cars. (Indicate the effect of each variance by selecting "F" for favourable, "U" for unfavourable, and "None" for no effect (i.e., zero variance).)

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