Fixed Cost per Month Cost per Car Washed

Cleaning supplies $ $0\mathrm{.}60$

Electricity $ $1,100$ $ $0\mathrm{.}05$

Maintenance $ $0\mathrm{.}30$

Wages and salaries $ $4,100$ $ $0\mathrm{.}30$

Depreciation $ $8,000$

Rent $ $2,200$

Administrative expenses $ $1,400$ $ $0\mathrm{.}04$

For example, electricity costs should be $$1,100$ per month plus $$0\mathrm{.}05$ per car washed. The company expects to wash $8,400$ cars in August and to collect an average of $$6\mathrm{.}40$ 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 $8,500$

Revenue $ $55,860$

Expenses:

Cleaning supplies $5,540$

Electricity $1,490$

Maintenance $2,760$

Wages and salaries $6,980$

Depreciation $8,000$

Rent $2,400$

Administrative expenses $1,636$

Total expenses $28,806$

Net operating income $ $27,054$