Question
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
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 | $ | 1,400 | $ | 0.07 | |
Maintenance | $ | 0.15 | |||
Wages and salaries | $ | 4,400 | $ | 0.20 | |
Depreciation | $ | 8,200 | |||
Rent | $ | 1,900 | |||
Administrative expenses | $ | 1,600 | $ | 0.01 | |
For example, electricity costs are $1,400 per month plus $0.07 per car washed. The company actually washed 8,600 cars in August and collected an average of $5.90 per car washed.
Required:
Prepare the companys flexible budget for August.
Puget Sound Divers is a company that provides diving services such as underwater ship repairs to clients in the Puget Sound area. The companys planning budget for May appears below:
Puget Sound Divers Planning Budget For the Month Ended May 31 | ||
Budgeted diving-hours (q) | 400 | |
Revenue ($400.00q) | $ | 160,000 |
Expenses: | ||
Wages and salaries ($12,000 + $120.00q) | 60,000 | |
Supplies ($6.00q) | 2,400 | |
Equipment rental ($2,300 + $24.00q) | 11,900 | |
Insurance ($3,800) | 3,800 | |
Miscellaneous ($540 + $1.42q) | 1,108 | |
Total expense | 79,208 | |
Net operating income | $ | 80,792 |
During May, the companys actual activity was 390 diving-hours.
Required:
Prepare a flexible budget for May. (Round your answers to the nearest whole dollar.)
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