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Lavage Rapide is a Canadian company that owns and operates a large automatic carwash facility near Montreal. The following table provides data concerning the company's
Lavage Rapide is a Canadian company that owns and operates a large automatic carwash facility near Montreal. The following table provides data concerning the company's costs: Fixed Cost per Month Cost per Cleaning supplies Electricity Maintenance Wages and salaries Depreciation Rent Car Washed S 0.50 S 0.07 S 0.30 S 0.40 S 1,000 S 4,500 S 8,200 S 2,000 S 1,600 S 0.04 For example, electricity costs are $1,000 per month plus $0.07 per car washed. The company expected to wash 8,500 cars in August and to collect an average of $6.80 per car washed The actual operating results for August appear below. Lavage Rapide Income Statement For the Month Ended August 31 Actual cars washed Revenue 8,600 $ 59,900 Expenses: Cleaning supplies 4,750 1,565 2,790 8,260 8,200 2,200 1,840 Maintenance Wages and salaries Rent Administrative expenses Total expense 29,605 Net operating income $ 30,295
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