Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

PLEASE ANSWER FULLY Lavage Rapide is a Canadian company that owns and operates a large automatic car wash facility near Montreal. The following table provides

PLEASE ANSWER FULLY Lavage Rapide is a Canadian company that 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 $ 0.80
Electricity $ 1,000 $ 0.07
Maintenance $ 0.20
Wages and salaries $ 4,000 $ 0.20
Depreciation $ 8,000
Rent $ 2,000
Administrative expenses $ 1,500 $ 0.03

For example, electricity costs should be $1,000 per month plus $0.07 per car washed. The company expects to wash 8,400 cars in August and to collect an average of $6.20 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 8,500
Revenue $ 54,180
Expenses:
Cleaning supplies 7,220
Electricity 1,558
Maintenance 1,920
Wages and salaries 6,040
Depreciation 8,000
Rent 2,200
Administrative expenses 1,652
Total expense 28,590
Net operating income $ 25,590

Required:

Calculate the company's revenue and spending 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.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Im Just A Girl Who Loves Auditing And Coffee

Authors: Michael Happiness

1st Edition

B08HT8643K, 979-8684238604

More Books

Students also viewed these Accounting questions