Exercise 9-13 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 data concerning the companys costs:

	Fixed Cost per Month			Cost per Car Washed
Cleaning supplies				$	0.70
Electricity	$	1,100		$	0.07
Maintenance				$	0.20
Wages and salaries	$	4,100		$	0.30
Depreciation	$	8,100
Rent	$	1,800
Administrative expenses	$	1,800		$	0.03

For example, electricity costs are $1,100 per month plus $0.07 per car washed. The company expects to wash 8,100 cars in August and to collect an average of $6.80 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		8,200
Revenue	$	57,180
Expenses:
Cleaning supplies		6,170
Electricity		1,637
Maintenance		1,860
Wages and salaries		6,890
Depreciation		8,100
Rent		2,000
Administrative expenses		1,943
Total expense		28,600
Net operating income	$	28,580

Required:

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