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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: Cost per Cleaning supplies Electricity Maintenance Wages and salaries Depreciation Rent Administrative expenses Fixed Cost per Month Car Washed $0.40 $1,500 $0.07 $0.30 $4,500 $0.30 $8,300 $2,200 $1,400 $0.02 For example, electricity costs are $1,500 per month plus $0.07 per car washed. The company expects to wash 8,200 cars in August and to collect an average of $6.70 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 8,300 $ 57,040 3,780 2,044 2,700 7,320 8,300 2,400 1,464 28,008 $ 29,032
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