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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 Cost per Month Cleaning supplies Electricity Maintenance Wages and salaries Depreciation Rent Administrative expenses Car Washed $ 0.60 $ 1,100 $ 0.07 $ 0.15 $ 4,700 $ 0.40 $ 8,200 $ 2,000 $ 1,400 $ 0.04 For example, electricity costs should be $1,100 per month plus $0.07 per car washed. The company expects to wash 8,300 cars in August and to collect an average of $5.90 per car washed. The actual operating results for August are as follows: Lavage Rapide. For the Month Ended August 31 Income Statement Actual cars washed Revenue Expenses: Cleaning supplies Electricity Maintenance Wages and salaries Depreciation Rent Administrative expenses Total expense Net operating income 8,400 $51,070 5,480 1,651 1,485 8,380 8,200 2,200 1,632 29,028 $ 22,042
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