Question
Lavage Rapide is a Canadian company that owns and operates a large automatic car wash facility near Montreal. The following table provides estimates concerning
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: Electricity Cleaning supplies Maintenance Pixed Cost per Month Cost per Car Washed $0.50 $0.09 $ 0.20 $1,100 Nages and salaries. $ 4,400 $ 0.30 Depreciation Rent Administrative expenses $8,200 $2,100 $1,500 $0.02 For example, electricity costs should be $1,100 per month plus $0.09 per car washed. The company expects to wash 8,000 cars in August and to collect an average of $6.00 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 Revenue Expenses: Cleaning supplies. Electricity Maintenance Wages and salaries Depreciation Rent Administrative expenses Total expense Net operating income 8,100 $50,100 4,500 1,790 1,840 7,160 8,200 2,300 1,560 27,350 $ 22,750
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