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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 Cost per per Month Car Washed Cleaning supplies 0.80 Electricity 1,200 0.15 Maintenance 0.20 5,000 Wages and salaries 0.30 Depreciation 6,000 Rent 8,000 4,000 0.10 Administrative expenses For example, electricity costs are $1,200 per month plus $0.15 per car washed. The company expected to wash 9,000 cars in August and to collect an average of $4.90 per car washed. The actual operating results for August appear below. Lavage Rapide Income Statement For the Month Ended August 31 Actual cars washed 8,800 43,080 Revenue Expenses: 7,560 Cleaning supplies 2,670 Electricity 2,260 Maintenance Wages and salaries 8,500 Depreciation 6,000 Rent 8,000 Administrative expenses 4,950 39,940 Total expense 3,140 Net operating income
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