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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
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 Cleaning supplies Electricity Maintenance Wages and salaries Depreciation Rent Administrative expenses $ 0.70 $ 1,400 $ 0.05 $ 0.20 $ 4,000 $ 0.30 $ 8,400 $ 2,100 $ 1,500 $ 0.01 For example, electricity costs should be $1,400 per month plus $0.05 per car washed. The company expects to wash 8,400 cars in August and to collect an average of $6.10 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 8,500 Revenue $53,340 Expenses: Cleaning supplies 6,380 Electricity 1,790 Maintenance 1,920 Wages and salaries 6,880 Depreciation 8,400 Rent 2,300
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