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	$ 1,500	$ 0.09
Maintenance		$ 0.20
Wages and salaries	$ 4,500	$ 0.30
Depreciation	$ 8,300
Rent	$ 1,800
Administrative expenses	$ 1,300	$ 0.05

For example, electricity costs should be $1,500 per month plus $0.09 per car washed. The company expects to wash 8,300 cars in August and to collect an average of $6.20 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	8,400
Revenue	$ 53,560
Expenses:
Cleaning supplies	4,650
Electricity	2,217
Maintenance	1,900
Wages and salaries	7,350
Depreciation	8,300
Rent	2,000
Administrative expenses	1,615
Total expense	28,032
Net operating income	$ 25,528

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.)