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EXERCISE 9-10 Planning Budget LO9-1 Lavage Rapide is a Canadian company that owns and operates a large automatic car wash facility near Montreal. The
EXERCISE 9-10 Planning Budget LO9-1 Lavage Rapide is a Canadian company that owns and operates a large automatic car wash facility near Montreal. The following table provides data concerning the company's costs: Cleaning supplies. Electricity .... Maintenance Wages and salaries Depreciation Rent Administrative expenses Fixed Cost Cost per per Month Car Washed $0.80 $1,200 $0.15 $0.20 $5,000 $0.30 $6,000 $8,000 $4,000 $0.10 For example, electricity costs are $1,200 per month plus $0.15 per car washed. The company expects to wash 9,000 cars in August and to collect an average of $4.90 per car washed. Required: Using Exhibit 9-2 as your guide, prepare the company's planning budget for August. EXERCISE 9-12 Activity Variances LO9-2 Refer to the data for Lavage Rapide in Exercise 9-10. The company actually washed 8,800 cars in August. Required: Calculate the company's activity variances for August. (Hint: Refer to Exhibit 9-6.)
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