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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 company's costs: Fixed Cost per Month $1,100 Cleaning supplies Electricity Maintenance Wages and salaries Depreciation Rent Administrative expenses Cost per Car Washed $ 0.70 $ 0.07 $ 0.25 $ 0.30 $ 4,800 $ 8,300 $ 2,100 $ 1,600 $ 0.04 For example, electricity costs should be $1,100 per month plus $0.07 per car washed. The company expects to wash 8,500 cars in August and to collect an average of $6.30 per car washed. Required: Prepare the company's planning budget for August. Lavage Rapide Planning Budget For the Month Ended August 31 Revenue Expenses: Cleaning supplies Electricity Maintenance Wages and salaries Depreciation Rent Administrative expenses Total expense Net operating income 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 company's costs: Fixed Cost per Month Cost per Car Washed $ 0.60 $0.10 $ 0.25 $ 0.30 Cleaning supplies Electricity Maintenance Wages and salaries Depreciation Rent Administrative expenses $1,300 $4,800 $8,500 $2,100 $1,600 $ 0.02 For example, electricity costs should be $1,300 per month plus $0.10 per car washed. The company actually washed 8,500 cars in August and collected an average of $6.60 per car washed. Required: Prepare the company's flexible budget for August. Lavage Rapide Flexible Budget For the Month Ended August 31 Revenue Expenses: Cleaning supplies Electricity Maintenance Wages and salaries Depreciation Rent Administrative expenses Total expense Net operating income Vulcan Flyovers offers scenic overflights of Mount St. Helens, the volcano in Washington State that explosively erupted in 1982. Data concerning the company's operations in July appear below: Vulcan Flyovers Operating Data For the Month Ended July 31 Actual Flexible Planning Results Budget Budget 56 56 54 Flights (9) $16,100 $19,040 $18,360 Revenue ($340.00g) Expenses: Wages and salaries ($3,400 + $90.009) Fuel ($33.009) Airport fees ($880 + $32.009) Aircraft depreciation ($10.009) Office expenses ($240 + $1.009) Total expense Net operating income 8, 400 8,440 8,260 2,012 1,848 1,782 2,542 2,672 2,608 560 560 540 464 296 294 13,978 13,816 13,484 $ 2,122 $ 5,224 $ 4,876 The company measures its activity in terms of flights. Customers can buy individual tickets for overflights or hire an entire plane for an overflight at a discount. Required: 1. Prepare a flexible budget performance report for July that includes revenue and spending variances and activity variances. (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.) Vulcan Flyovers Flexible Budget Performance Report For the Month Ended July 31 Flexible Budget 56 Actual Results 56 Planning Budget 54 Flights $ 16,100 $ 19,040 $ 18,360 8,400 8,440 8,260 1,782 2,012 1,848 Revenue Expenses: Wages and salaries Fuel Airport fees Aircraft depreciation Office expenses Total expense Net operating income 2,542 2,672 2,608 560 540 560 296 464 294 13,484 13,816 13,978 2,122 $ $ 5,224 4,876 Alyeski Tours operates day tours of coastal glaciers in Alaska on its tour boat the Blue Glacier. Management has identified two cost driversthe number of cruises and the number of passengersthat it uses in its budgeting and performance reports. The company publishes a schedule of day cruises that it may supplement with special sailings if there is sufficient demand. Up to 88 passengers can be accommodated on the tour boat. Data concerning the company's cost formulas appear below: Cost per Cruise $ 473.00 Cost per Passenger $ 3.40 Vessel operating costs Advertising Administrative costs Insurance Fixed Cost per Month $ 6,800 $ 2,900 $ 5,400 $ 3,800 $36.00 $1.50 For example, vessel operating costs should be $6,800 per month plus $473.00 per cruise plus $3.40 per passenger. The company's sales should average $29.00 per passenger. In July, the company provided 59 cruises for a total of 3,100 passengers. Required: Prepare the company's flexible budget for July Alyeski Tours Flexible Budget For the Month Ended July 31 Revenue Expenses: Vessel operating costs Advertising Administrative costs Insurance Total expense Net operating income
