Exercise $9-11($Algo$)$ Activity Variances $[$LO$9-2]$

Lavage Rapide is a Canadian company that owns and operates a large automatic car wash facility near Montreal. The following table provides estimates concerning the company$$s costs:

Fixed Cost per Month Cost per Car Washed

Cleaning supplies $ $0\mathrm{.}70$

Electricity $ $1,500$ $ $0\mathrm{.}06$

Maintenance $ $0\mathrm{.}15$

Wages and salaries $ $4,100$ $ $0\mathrm{.}30$

Depreciation $ $8,300$

Rent $ $2,000$

Administrative expenses $ $1,500$ $ $0\mathrm{.}02$

For example, electricity costs should be $$1,500$ per month plus $$0\mathrm{.}06$ per car washed. The company expects to wash $8,000$ cars in August and to collect an average of $$6\mathrm{.}50$ per car washed. The company actually washed $8,100$ cars in August.