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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 Car Washed Fixed Cost per Month Cleaning supplies $0.50 Electricity $1,100 $0.06 Maintenance $0.20 Wages and salaries $4,200 $0.30 Depreciation $8,400 Rent $1,800 Administrative expenses $1,700 $0.03 For example, electricity costs are $1,100 per month plus $0.06 per car washed. The company expects to wash 8,300 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 8,400 Revenue $52,730 Expenses: Cleaning supplies 4,650 Electricity 1,568 Maintenance 1,900 Wages and salaries 7,050 Depreciation 8,400 Rent 2,000 Administrative expenses 1,849 Total expense 27,417 Net operating income $25,313
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