please see attached problem and answer in as much details as possible.

Question 1 (10 marks) Vaughan Speed Clean budgeting The Vaughan Speed Clean company is a young company that operates three car wash locations in the Greater Toronto Area. The owner relies on the abilities of three managers to run the car wash locations. At the end of each quarter, the owner evaluates the performance of each car wash location. His evaluations determine the size of the location manager's bonus. If the location achieves an annual ROA of 10%, the location manager gets $1,000 for the quarter. The bonus is also augmented by $1 for every $10 the location exceeds its profit target. Return on assets (ROA) is the measure of profit earned before interest expense in relation to the assets employed by an entity. It is calculated by expressing net income as a percentage of average total assets. The term is similar to return on investment. However, the bonus contract gives the owner the right to make subjective adjustments for the effects of factors he deems outside the control of the location managers. In the past few months, he has made such adjustments for the adverse effects on revenue of having city workers repaving the street just in front of one car wash location. By far the largest uncontrollable factor that is regularly considered is the weather. In particular, sales volume decreases sharply when it rains or snows. The budget, which is updated at the beginning of the month, is prepared on an assumption of hours of good weather. Inevitably, those assumptions are not accurate. The last quarter of 2013 was atypical. It snowed and rained many more hours than were assumed in the budget, and actual profits for the three locations were below the budgeted profit level. The results for the JaneHW7 location are shown in Exhibit 1. Exhibit 2 shows some operating assumptions and statistics for the quarter. The JaneHW7 location has an average of $200,000 of total assets and is open every day, 10 hours per day, when it is not raining. When it is raining, the car wash is closed. The car wash employees are paid the legally required minimum wage plus a fixed amount for each car wash completed, so labour costs are highly variable with revenues. Exhibit 1: Profit compared to budget for JaneHW7 Last quarter 2013 Budget1 Revenue Variable expenses, including wages (50% of revenues) Actual Variance $184,000 $120,555 $63,445 U 92,000 60,277 31,723 F Fixed expenses 53,820 55,000 1,180 U Total expenses 145,820 115,277 30,543 F 38,180 $ 5,278 $ $32,902 U Profit 1 Based on 800 hours of good weather Exhibit 2: Operating statistics for JaneHW7 Last quarter 2013 Budgeted Average number of vehicles washed in a good weather hour Actual 23 27 Average revenue per vehicle $10 $9.50 Total hours in quarter 920 920 Hours of bad weather 120 450 Hours of good weather 800 470 Required a.How large will the bonus be for the JaneHW7 manager for the last quarter of 2013? b.Was the JaneHW7 location properly managed in the last quarter? Your answer should consist of variance calculations (based on information provided in Exhibit 2) and an assessment of which variances are controllable