Exercise 9-9 Prepare a Report Showing Revenue and Spending Variances [LO9-2]

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				$	0.50
Electricity	$	1,000		$	0.08
Maintenance				$	0.15
Wages and salaries	$	4,600		$	0.30
Depreciation	$	8,500
Rent	$	1,800
Administrative expenses	$	1,300		$	0.05

For example, electricity costs are $1,000 per month plus $0.08 per car washed. The company expects to wash 8,000 cars in August and to collect an average of $6.10 per car washed.

The actual operating results for August appear below.

Lavage Rapide
Income Statement
For the Month Ended August 31
Actual cars washed		8,100
Revenue	$	50,900
Expenses:
Cleaning supplies		4,500
Electricity		1,610
Maintenance		1,440
Wages and salaries		7,360
Depreciation		8,500
Rent		2,000
Administrative expenses		1,600
Total expense		27,010
Net operating income	$	23,890

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. Do not round intermediate calculations.)

Lavage Rapide
Revenue and Spending Variances
For the Month Ended August 31
Revenue
Expenses:
Cleaning supplies
Electricity
Maintenance
Wages and salaries
Depreciation
Rent
Administrative expenses
Total expense
Net operating income