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: Fixed Cost per MonthCost per Car WashedCleaning supplies $ 0.70Electricity$ 1,100$ 0.09Maintenance $ 0.15Wages and salaries$ 4,000$ 0.20Depreciation$ 8,200 Rent$ 1,900 Administrative expenses$ 1,700$ 0.02 For example, electricity costs should be $1,100 per month plus $0.09 per car washed. The company expects to wash 8,200 cars in August and to collect an average of $6.50 per car washed.Prepare the company’s planning budget for August.

Planning budget is based on Budgeted level of activity volume. It includes revenues and costs based…

Answered: Fixed Cost per Month Cost per Car…

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter6: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 1E: Classify Costs Following is a list of various costs incurred in producing replacement automobile...

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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:

	Fixed Cost per Month	Cost per Car Washed
Cleaning supplies		$ 0.70
Electricity	$ 1,100	$ 0.09
Maintenance		$ 0.15
Wages and salaries	$ 4,000	$ 0.20
Depreciation	$ 8,200
Rent	$ 1,900
Administrative expenses	$ 1,700	$ 0.02

For example, electricity costs should be $1,100 per month plus $0.09 per car washed. The company expects to wash 8,200 cars in August and to collect an average of $6.50 per car washed.

Prepare the company’s planning budget for August.

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