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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 data concerning the company’s costs:     Fixed Cost per Month Cost per Car Washed Cleaning supplies       $ 0.80   Electricity $ 1,500   $ 0.06   Maintenance       $ 0.10   Wages and salaries $ 4,300   $ 0.40   Depreciation $ 8,400         Rent $ 1,900         Administrative expenses $ 1,800   $ 0.04       For example, electricity costs are $1,500 per month plus $0.06 per car washed. The company expects to wash 8,300 cars in August and to collect an average of $6.80 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 $ 58,540 Expenses:   Cleaning supplies   7,140 Electricity   1,968 Maintenance   1,070 Wages and salaries   7,980 Depreciation   8,400 Rent   2,100 Administrative expenses   2,032 Total expense   30,690

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 per Month Cost per Car Washed Cleaning supplies       $ 0.80   Electricity $ 1,500   $ 0.06   Maintenance       $ 0.10   Wages and salaries $ 4,300   $ 0.40   Depreciation $ 8,400         Rent $ 1,900         Administrative expenses $ 1,800   $ 0.04       For example, electricity costs are $1,500 per month plus $0.06 per car washed. The company expects to wash 8,300 cars in August and to collect an average of $6.80 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 $ 58,540 Expenses:   Cleaning supplies   7,140 Electricity   1,968 Maintenance   1,070 Wages and salaries   7,980 Depreciation   8,400 Rent   2,100 Administrative expenses   2,032 Total expense   30,690

Managerial Accounting
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 1PA: Classify costs Seymour Clothing Co. manufactures a variety of clothing types for distribution to...
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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 data concerning the company’s costs:

 

  Fixed Cost
per Month		 Cost per
Car Washed
Cleaning supplies       $ 0.80  
Electricity $ 1,500   $ 0.06  
Maintenance       $ 0.10  
Wages and salaries $ 4,300   $ 0.40  
Depreciation $ 8,400        
Rent $ 1,900        
Administrative expenses $ 1,800   $ 0.04  
 

 

For example, electricity costs are $1,500 per month plus $0.06 per car washed. The company expects to wash 8,300 cars in August and to collect an average of $6.80 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 $ 58,540
Expenses:  
Cleaning supplies   7,140
Electricity   1,968
Maintenance   1,070
Wages and salaries   7,980
Depreciation   8,400
Rent   2,100
Administrative expenses   2,032
Total expense   30,690
Net operating income $ 27,850
 

 

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.)

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 $0.80 $0.06 $0.10 $0.40 Cleaning supplies Electricity Maintenance $1,500 Wages and salaries Depreciation Rent $4,300 $8,400 $1,900 Administrative $1,800 $0.04 expenses For example, electricity costs are $1,500 per month plus $0.06 per car washed. The company expects to wash 8,300 cars in August and to collect an average of $6.80 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 $58,540 Revenue Expenses: Cleaning supplies Electricity Maintenance Wages and salaries Depreciation Rent Administrative 7,140 1,968 1,070 7,980 8,400 2,100 2,032 expenses Total expense 30,690 Net operating income $27,850 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.) Lavage Rapide Revenue and Spending Variances For the Month Ended August 31 Revenue F Expenses: Cleaning supplies Electricity Maintenance Wages and salaries Depreciation Rent O None 200 U Administrative F expenses Total expense Net operating income F
Transcribed Image Text: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 $0.80 $0.06 $0.10 $0.40 Cleaning supplies Electricity Maintenance $1,500 Wages and salaries Depreciation Rent $4,300 $8,400 $1,900 Administrative $1,800 $0.04 expenses For example, electricity costs are $1,500 per month plus $0.06 per car washed. The company expects to wash 8,300 cars in August and to collect an average of $6.80 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 $58,540 Revenue Expenses: Cleaning supplies Electricity Maintenance Wages and salaries Depreciation Rent Administrative 7,140 1,968 1,070 7,980 8,400 2,100 2,032 expenses Total expense 30,690 Net operating income $27,850 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.) Lavage Rapide Revenue and Spending Variances For the Month Ended August 31 Revenue F Expenses: Cleaning supplies Electricity Maintenance Wages and salaries Depreciation Rent O None 200 U Administrative F expenses Total expense Net operating income F
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