Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Lavage Rapide is a Canadian company that owns and operates a large automatic carwash facility near Montreal. The following table provides data concerning the companys

Lavage Rapide is a Canadian company that owns and operates a large automatic carwash facility near Montreal. The following table provides data concerning the companys costs:

Fixed Cost per Month Cost per Car Washed
Cleaning supplies $ 0.50
Electricity $ 1,000 $ 0.09
Maintenance $ 0.20
Wages and salaries $ 4,700 $ 0.20
Depreciation $ 8,300
Rent $ 2,100
Administrative expenses $ 1,300 $ 0.04

For example, electricity costs are $1,000 per month plus $0.09 per car washed. The company expected to wash 8,300 cars in August and to collect an average of $6.60 per car washed. The company actually washed 8,400 cars.

The actual operating results for August appear below.

Lavage Rapide Income Statement For the Month Ended August 31
Actual cars washed 8,400
Revenue $ 56,880
Expenses:
Cleaning supplies 4,650
Electricity 1,717
Maintenance 1,900
Wages and salaries 6,720
Depreciation 8,300
Rent 2,300
Administrative expenses 1,532
Total expense 27,119
Net operating income $ 29,761

Required:

Compute the company's activity variances for August.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

ISE Financial Accounting

Authors: Robert Libby, Patricia Libby, Frank Hodge Ch

11th Edition

1265083924, 9781265083922

More Books

Students also viewed these Accounting questions