Answered step by step
Verified Expert Solution
Question
1 Approved Answer
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
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 Cast Cost per per Month Car Washed Cleaning supplies $ 6.76 Electricity $ 1,366 $ 6.68 Maintenance $ 6.15 Wages and salaries $ 4,666 $ 6.28 Depreciation $ 8,466 Rent $ 2, 299 Administrative expenses $ 1,368 $ 6.62 For example, electricity costs should be $1,300 per month plus $0.08 per car washed. The company expects to wash 8,100 cars in August and to collect an average of $6.90 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 8,266 Revenue $ 57,996 Expenses: Cleaning supplies 6,1?6 Electricity 1,918 Maintenance 1,455 Wages and salaries 5,986 Depreciation 8,466 Rent 2,499 Administrative expenses 1,362 Total expense 27,685 Net operating income $ 36,365 Required: Calculate the company's revenue and spending variances for August. (Indicate the effect of each variance by selecting "F'I for favorable, "U" for unfavorable. and "None" for no effect [i.e.. zero variance). Input all amounts as positive values.) Revenue Expenses: Cleaning supplies Electricity Maintenance Wages and salaries Depreciation Administrative expenses Total expense Net operating income
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started