Question
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 companys costs:
Fixed Cost per Month | Cost per Car Washed | |
---|---|---|
Cleaning supplies | $ 0.80 | |
Electricity | $ 1,400 | $ 0.07 |
Maintenance | $ 0.20 | |
Wages and salaries | $ 4,900 | $ 0.30 |
Depreciation | $ 8,200 | |
Rent | $ 1,800 | |
Administrative expenses | $ 1,700 | $ 0.02 |
For example, electricity costs should be $1,400 per month plus $0.07 per car washed. The company actually washed 8,600 cars in August and collected an average of $6.80 per car washed.
Required:
Prepare the companys flexible budget for August.
Revenue
Expenses:
Cleaning supplies
Electricity
Maintenance
Wages and salaries
Depreciation
Rent
Administrative expenses
Total expense
Net operating income
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