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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 $ 0.90 Electricity $ 2,600 0.30 Maintenance 0.50 Wages and salaries 5,800 0.60 Depreciation 9,400 Rent 3,200 Administrative expenses 2,910 0.05 For example, electricity costs are $2,600 per month plus $0.30 per car washed. The company expects to wash 9,100 cars in October and to collect an average of $8.00 per car washed. Auto Lavages actual level of activity was 9,200 cars. The actual revenues and expenses for October are given below: Auto Lavage Income Statement For the Month Ended October 31 Actual cars washed 9,200 Sales $ 78,000 Variable expenses: Cleaning supplies 8,515 Electricity 2,822 Maintenance 4,350 Wages and salaries 5,860 Administrative 510 Fixed expenses: Electricity 2,660 Wages and salaries 5,800 Depreciation 9,400 Rent 3,200 Administrative 2,845 Total expense 45,962 Net operating income $ 32,038 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).) . Prepare a comprehensive performance report for October. Assume that the static budget for October was based on an activity level of 9,100 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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