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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 | $ 0.60 | ||
Electricity | $ 1,500 | $ 0.09 | |
Maintenance | $ 0.15 | ||
Wages and salaries | $ 4,900 | $ 0.40 | |
Depreciation | $ 8,200 | ||
Rent | $ 1,900 | ||
Administrative expenses | $ 1,800 | $ 0.01 |
For example, electricity costs should be $1,500 per month plus $0.09 per car washed. The company expects to wash 8,200 cars in August and to collect an average of $6.90 per car washed.
The actual operating results for August are as follows:
Lavage Rapide | |
---|---|
Income Statement | |
For the Month Ended August 31 | |
Actual cars washed | 8,300 |
Revenue | $ 58,680 |
Expenses: | |
Cleaning supplies | 5,420 |
Electricity | 2,208 |
Maintenance | 1,470 |
Wages and salaries | 8,540 |
Depreciation | 8,200 |
Rent | 2,100 |
Administrative expenses | 1,782 |
Total expenses | 29,720 |
Net operating income | $ 28,960 |
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