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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 the

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 companys costs:

Fixed Cost per MonthCost per Car WashedCleaning supplies $ 0.70Electricity$ 1,000$ 0.08Maintenance $ 0.15Wages and salaries$ 4,700$ 0.40Depreciation$ 8,200 Rent$ 2,100 Administrative expenses$ 1,300$ 0.03

For example, electricity costs are $1,000 per month plus $0.08 per car washed. The company expects to wash 8,000 cars in August and to collect an average of $6.20 per car washed.

The actual operating results for August are as follows:

Lavage RapideIncome StatementFor the Month Ended August 31Actual cars washed8,100Revenue$ 51,700Expenses: Cleaning supplies6,100Electricity1,610Maintenance1,440Wages and salaries8,260Depreciation8,200Rent2,300Administrative expenses1,440Total expense29,350Net operating income$ 22,350

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