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QUESTION 1. QUESTION 2. Lavage Rapide is a Canadian company that owns and operates a large automatic car wash facility near Montreal. The following table

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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 company's costs: Cleaning supplies Electricity Maintenance Wages and salaries Depreciation Rent Administrative expenses Fixed Cost Cost per per Month Car Washed $0.60 $1,100 $0.09 $0.10 $4,900 $0.20 $8,200 $2,000 $1,700 $0.03 For example, electricity costs should be $1,100 per month plus $0.09 per car washed. The company expects to wash 8,300 cars in August and to collect an average of $6.60 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 8,400 Revenue $56,880 Expenses: Cleaning supplies 5,480 Electricity 1,817 Maintenance 1,070 Wages and salaries 6,920 Depreciation 8,200 Rent 2,200 Administrative expenses 1,849 Total expense 27,536 Net operating income $29,344 Required: Calculate the company's revenue and spending variances for August. (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.) Answer is complete but not entirely Lavage Rapide Revenue and Spending Variances For the Month Ended August 31 $ Revenue XF 54,780 Expenses: Cleaning supplies 4,980XU Electricity 2,594 F Maintenance 830X U Wages and salaries 6,560XU Depreciation 8,200X None Rent 2,000XU Administrative 1,949X F expenses Total expense 27,113X/U $ Net operating income SI 27,667 F 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 company's costs: Cleaning supplies Electricity Maintenance Wages and salaries Depreciation Rent Administrative expenses Fixed Cost Cost per per Month Car Washed $0.50 $1,500 $0.10 $0.25 $4,600 $0.20 $8,300 $2,100 $1,600 $0.02 For example, electricity costs should be $1,500 per month plus $0.10 per car washed. The company expects to wash 8,400 cars in August and to collect an average of $6.10 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 $53,340 Expenses: Cleaning supplies 4,700 Electricity 2,310 Maintenance 2,340 Wages and salaries 6,640 Depreciation 8,300 Rent 2,300 Administrative 1,668 expenses Total expense 28,258 Net operating income $25,082 Required: Prepare a flexible budget performance report that shows the company's revenue and spending variances and activity variances for August. (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.) Lavage Rapide Flexible Budget Performance Report For the Month Ended August 31 Actual Revenue and Activity Flexible Results Variances Spending Budget Variances 8,500 Planning Budget Cars washed $ 53,340 Revenue Expenses: Cleaning supplies Electricity Maintenance Wages and salaries Depreciation Rent Administrative expenses Total expense Net operating income 4,700 2,310 2,340 6,640 8,300 2,300 1,668 28,258 $ 25,082

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