Exercise $9-12($Algo$)$ Revenue and Spending Variances $[$LO$9-3]$

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 $ $0\mathrm{.}50$

Electricity $ $1,100$ $ $0\mathrm{.}09$

Maintenance $ $0\mathrm{.}10$

Wages and salaries $ $4,700$ $ $0\mathrm{.}30$

Depreciation $ $8,300$

Rent $ $1,900$

Administrative expenses $ $1,400$ $ $0\mathrm{.}02$

For example, electricity costs should be $$1,100$ per month plus $$0\mathrm{.}09$ per car washed. The company expects to wash $8,400$ cars in August and to collect an average of $$6\mathrm{.}50$ per car washed.

The actual operating results for August are as follows:

Lavage Rapide

Income Statement

For the Month Ended August $31$

Actual cars washed $8,500$

Revenue $ $56,700$

Expenses:

Cleaning supplies $4,700$

Electricity $1,826$

Maintenance $1,080$

Wages and salaries $7,580$

Depreciation $8,300$

Rent $2,100$

Administrative expenses $1,468$

Total expense $27,054$

Net operating income $ $29,646$

Required:

Calculate the company's revenue and spending variances for August.