Luxury Car Spa owns and operates a large automatic car wash facility. The number of cars cleaned per month varies widely, and management would like to better understand costs by preparing a flexible budget. Please fill in the missing data to prepare a flexible budget for the company.

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Required: 1) Complete the Flexible Budget above.

2) Assume that for May the company had expected to clean 8,000 cars. The actual number of cars cleaned was 8,300. Actual cost information for August is given above. Use this information and your flexible budget to prepare a Flexible Budget Performance Report for May.

3) What is your opinion of how the company performed for May? What has the company done well, and what does it need to improve?

LUXURY CAR SPA FLEXIBLE BUDGET LUXURY CAR SPA MAY ACTUALS Actual Information for May # of Cars 8,300 Monthly Activity Level (# of Cars Per Car 7,000 8,000 9,000 Sales Variable Expenses ? Sales Variable Expenses $80,000 $83,000 Cleaning Supplies Utilities Maintenance 6,000 4,800 1,200 Cleaning Supplies Utilities Maintenance 6,350 4,865 1,600 12,815 70,185 Total Variable Expenses Contribution Margin Total Variable Expenses Contribution Margin Fixed Expenses Fixed Expenses Operator Wages Depreciation Rent Insurance Selling and Admin 10,000 20,000 8,000 1,000 4,000 43,000 Operator Wages Depreciation Rent Insurance Selling and Admin 10,050 20,200 8,000 1,100 3,800 43,150 27,035 Total Fixed Expenses Operating Income Total Fixed Expenses Operating Income