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Please include calculations. Thanks Auto Lavage is a Canadian company that owns and operates a large automatic carwash facility near Quebec. The following table provides
Please include calculations. Thanks
Auto Lavage is a Canadian company that owns and operates a large automatic carwash facility near Quebec. The following table provides data concerning the company's expected costs: Cleaning supplies Electricity Maintenance Wages and salaries Depreciation Rent Administrative expenses Fixed Cost Cost per per Month Car Washed $0.90 $ 2,600 0.30 0.50 5,800 0.60 9,400 3,200 2,910 0.05 For example, electricity costs are $2,600 per month plus $0.30 per car washed. The company expects to wash 9,100 cars in October and to collect an average of $8.00 per car washed. Auto Lavage's actual level of activity was 9,200 cars. The actual revenues and expenses for October are given below: Auto Lavage Income Statement For the Month Ended October 31 Actual cars washed 9,200 Sales $ 78,000 8,515 2,822 4,350 5,860 510 Variable expenses: Cleaning supplies Electricity Maintenance Wages and salaries Administrative Fixed expenses: Electricity Wages and salaries Depreciation Rent Administrative 2,660 5,800 9,400 3,200 2,845 Total expense 45,962 Net operating income $ 32,038 Required: 1. Prepare a flexible budget performance report for October. (Indicate the effect of each variance by selecting "F" for favourable, "U" for unfavourable, and "None" for no effect (i.e., zero variance).) AUTO LAVAGE INC. Flexible Budget Performance Report For the Month Ended October 31 Cost Flexible Formula Actual (per car) Budget Flexible Budget Variance Sales Variable Expenses: Cleaning supplies Electricity Maintenance Wages and salaries Administrative Depreciation Rent Total variable expenses 0.00 0 0 0 Fixed expenses: Electricity Wages and salaries Depreciation Rent Administrative Total fixed expenses Operating income 0 0 0 0 $ 2. Prepare a comprehensive performance report for October. Assume that the static budget for October was based on an activity level of 9,100 cars. (Indicate the effect of each variance by selecting "F" for favourable, "U" for unfavourable, and "None" for no effect (i.e., zero variance).) AUTO LAVAGE INC. Comprehensive Performance Report For the Month Ended October 31 Actual Flexible Budget Variance Flexible Budget Sales Volume Variance Static Budget 9,200 9,200 9,100 Number of cars Sales Variable Expenses: Cleaning supplies Electricity Maintenance Wages and salaries Administrative Depreciation Rent Total variable expenses Contribution margin Fixed expenses: 0 0 Rent Total fixed expenses 0 0 $ 0f $ 0f $ 0Step by Step Solution
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