Exercise 9-12 (Algo) Revenue and Spending Variances [LO9-3]

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 companys costs:

	Fixed Cost per Month	Cost per Car Washed
Cleaning supplies		$ 0.50
Electricity	$ 1,100	$ 0.07
Maintenance		$ 0.30
Wages and salaries	$ 4,600	$ 0.40
Depreciation	$ 8,100
Rent	$ 1,900
Administrative expenses	$ 1,700	$ 0.05

For example, electricity costs should be $1,100 per month plus $0.07 per car washed. The company expects to wash 8,200 cars in August and to collect an average of $5.90 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	8,300
Revenue	$ 50,480
Expenses:
Cleaning supplies	4,600
Electricity	1,644
Maintenance	2,700
Wages and salaries	8,240
Depreciation	8,100
Rent	2,100
Administrative expenses	2,010
Total expense	29,394
Net operating income	$ 21,086

Required:

Calculate the company's revenue and spending variances for August. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.)