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 MonthCost per Car Washed
Cleaning supplies $0.60
Electricity$1,400 $0.07
Maintenance $0.15
Wages and salaries$4,600 $0.20
Depreciation$8,200
Rent$2,000
Administrative expenses$1,700 $0.05
For example, electricity costs are $1,400 per month plus $0.07 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.)
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