Question
Lavage Rapide owns and operates a large automatic car wash facility near Montreal. The following table provides estimates concerning the companys costs: Fixed Cost per
Lavage Rapide owns and operates a large automatic car wash facility near Montreal. The following table provides estimates concerning the companys costs:
Fixed Cost per Month | Cost per Car Washed | ||
---|---|---|---|
Cleaning supplies | $ 0.50 | ||
Electricity | $ 1,500 | $ 0.08 | |
Maintenance | $ 0.30 | ||
Wages and salaries | $ 4,700 | $ 0.30 | |
Depreciation | $ 8,400 | ||
Rent | $ 1,900 | ||
Administrative expenses | $ 1,500 | $ 0.04 |
For example, electricity costs should be $1,500 per month plus $0.08 per car washed. The company expects to wash 8,500 cars in August and to collect an average of $6.90 per car washed. The company actually washed 8,600 cars in August.
Required:
Calculate the company's activity variances for August.
Note: 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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