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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 data concerning
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 company's costs: Cleaning supplies Electricity Maintenance Wages and salaries Depreciation ok nt Rent unces Administrative expenses Fixed Cost per Month Cost per Car Washed $0.80 $1,400 $0.06 $0.20 $4,300 $0.30 $8,400 $2,000 $1,400 $0.04 For example, electricity costs are $1,400 per month plus $0.06 per car washed. The company expects to wash 8,500 cars in August and to collect an average of $6.60 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 8,600 Revenue $58,200 Expenses Cleaning supplies 7,300 Electricity 1,080 Maintenance 1,940 Wages and salaries 7,210 Depreciation 8,400 Rent 2,200 Administrative expenses 1,640 Total expense 30,570 Net operating income $27,630
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