Question
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 Month | Cost per Car Washed | ||||||
Cleaning supplies | $ | 0.70 | |||||
Electricity | $ | 1,100 | $ | 0.06 | |||
Maintenance | $ | 0.15 | |||||
Wages and salaries | $ | 4,700 | $ | 0.30 | |||
Depreciation | $ | 8,400 | |||||
Rent | $ | 2,100 | |||||
Administrative expenses | $ | 1,300 | $ | 0.02 | |||
For example, electricity costs are $1,100 per month plus $0.06 per car washed. The company expects to wash 8,400 cars in August and to collect an average of $6.80 per car washed. The company actually washed 8,500 cars in August.
Required:
Calculate the company's activity variances for August. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.)
Lavage Rapide | ||
Activity Variances | ||
For the Month Ended August 31 | ||
Revenue | not attempted | Fselected answer correct |
Expenses: | ||
Cleaning supplies | not attempted | Uselected answer correct |
Electricity | not attempted | Uselected answer correct |
Maintenance | not attempted | Uselected answer correct |
Wages and salaries | not attempted | Uselected answer correct |
Depreciation | not attempted | Noneselected answer correct |
Rent | not attempted | Noneselected answer correct |
Administrative expenses | not attempted | Uselected answer correct |
Total expense | not attempted | Uselected answer correct |
Net operating income | not attempted | F |
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