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		$	0.08
Maintenance				$	0.10
Wages and salaries	$	4,300		$	0.30
Depreciation	$	8,300
Rent	$	2,100
Administrative expenses	$	1,400		$	0.02

For example, electricity costs are $1,100 per month plus $0.08 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 appear below.

Lavage Rapide
Income Statement
For the Month Ended August 31
Actual cars washed		8,300
Revenue	$	50,480
Expenses:
Cleaning supplies		6,240
Electricity		1,726
Maintenance		1,060
Wages and salaries		7,120
Depreciation		8,300
Rent		2,300
Administrative expenses		1,464
Total expense		28,210
Net operating income	$	22,270

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.)