Lavage Rapide is a Canadian company that owns and operates a large automatic car wash facility near Montreal. The following table provides data concerning the company's costs: Fixed Cost Cost per per Month Car Washed $0.70 $0.06 $0.30 $0.30 Cleaning supplies Electricity Maintenance $1,000 Wages and salaries Depreciation $4,100 $8,000 $2,200 Rent Administrative $1,300 $0.01 expenses For example, electricity costs are $1,000 per month plus $0.06 per car washed. The company expects to wash 8,400 cars in August and to collect an average of $5.90 per car washed. The actual operating results for August appear below. Lavage Rapide Income Statement For the Month Ended August 31 Actual cars washed 8,500 Revenue $51,660 Expenses: Cleaning supplies Electricity 6,380 1,474 2,760 6,980 8,000 2,400 Maintenance Wages and salaries Depreciation Rent Administrative 1,284 expenses Total expense 29,278 Net operating income $22,382 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
Lavage Rapide is a Canadian company that owns and operates a large automatic car wash facility near Montreal. The following table provides data concerning the company's costs: Fixed Cost Cost per per Month Car Washed $0.70 $0.06 $0.30 $0.30 Cleaning supplies Electricity Maintenance $1,000 Wages and salaries Depreciation $4,100 $8,000 $2,200 Rent Administrative $1,300 $0.01 expenses For example, electricity costs are $1,000 per month plus $0.06 per car washed. The company expects to wash 8,400 cars in August and to collect an average of $5.90 per car washed. The actual operating results for August appear below. Lavage Rapide Income Statement For the Month Ended August 31 Actual cars washed 8,500 Revenue $51,660 Expenses: Cleaning supplies Electricity 6,380 1,474 2,760 6,980 8,000 2,400 Maintenance Wages and salaries Depreciation Rent Administrative 1,284 expenses Total expense 29,278 Net operating income $22,382 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
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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