Question
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 | $ | 0.60 | |||
Electricity | $ | 1,100 | $ | 0.09 | |
Maintenance | $ | 0.15 | |||
Wages and salaries | $ | 5,000 | $ | 0.30 | |
Depreciation | $ | 8,000 | |||
Rent | $ | 1,900 | |||
Administrative expenses | $ | 1,400 | $ | 0.05 | |
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For example, electricity costs are $1,100 per month plus $0.09 per car washed. The company expected to wash 8,100 cars in August and to collect an average of $6.10 per car washed. The company actually washed 8,200 cars.
The actual operating results for August appear below.
Lavage Rapide Income Statement For the Month Ended August 31 | ||
Actual cars washed | 8,200 | |
Revenue | $ | 51,510 |
Expenses: | ||
Cleaning supplies | 5,360 | |
Electricity | 1,799 | |
Maintenance | 1,455 | |
Wages and salaries | 7,790 | |
Depreciation | 8,000 | |
Rent | 2,100 | |
Administrative expenses | 1,705 | |
Total expense | 28,209 | |
Net operating income | $ | 23,301 |
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Required:
Compute 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.)
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