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	$ 1,400	$ 0.07
Maintenance		$ 0.20
Wages and salaries	$ 4,500	$ 0.40
Depreciation	$ 8,400
Rent	$ 1,800
Administrative expenses	$ 1,700	$ 0.04

For example, electricity costs should be $1,400 per month plus $0.07 per car washed. The company expects to wash 8,300 cars in August and to collect an average of $6.10 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	$ 52,730
Expenses:
Cleaning supplies	4,650
Electricity	1,951
Maintenance	1,900
Wages and salaries	8,180
Depreciation	8,400
Rent	2,000
Administrative expenses	1,932
Total expense	29,013
Net operating income	$ 23,717

Required:

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