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avage Rapide owns and operates a large automatic car wash facility near Montreal. The following table provides estimates concerning the companys costs: Fixed Cost per
avage Rapide owns and operates a large automatic car wash facility near Montreal. The following table provides estimates concerning the companys costs:
Fixed Cost per Month | Cost per Car Washed | ||
---|---|---|---|
Cleaning supplies | $ 0.60 | ||
Electricity | $ 1,400 | $ 0.07 | |
Maintenance | $ 0.20 | ||
Wages and salaries | $ 4,200 | $ 0.20 | |
Depreciation | $ 8,300 | ||
Rent | $ 2,100 | ||
Administrative expenses | $ 1,600 | $ 0.03 |
For example, electricity costs should be $1,400 per month plus $0.07 per car washed. The company expects to wash 8,200 cars in August and to collect an average of $6.70 per car washed. The company actually washed 8,300 cars in August.
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