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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
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 companys costs:
Fixed Cost per Month | Cost per Car Washed | ||||||
Cleaning supplies | $ | 0.60 | |||||
Electricity | $ | 1,500 | $ | 0.07 | |||
Maintenance | $ | 0.15 | |||||
Wages and salaries | $ | 4,100 | $ | 0.30 | |||
Depreciation | $ | 8,200 | |||||
Rent | $ | 1,900 | |||||
Administrative expenses | $ | 1,500 | $ | 0.04 | |||
For example, electricity costs should be $1,500 per month plus $0.07 per car washed. The company expects to wash 8,400 cars in August and to collect an average of $6.80 per car washed. The company actually washed 8,500 cars in August.
Required:
Calculate the company's activity variances for August.
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