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 Electricity $0.50 $0.06 $0.25 $0.40 $1,400 Maintenance Wages and salaries Depreciation Rent Administrative expenses $4,500 $8, 300 $2,100 $1,500 $0.03 For example, electricity costs are $1,400 per month plus $0.06 per car washed. The company expects to wash 8,200 cars in August and to collect an average of $6.30 per car washed. The company actually washed 8,300 cars in August. Required: Calculate the company's 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.) Required: Calculate the company's 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 Activity Variances For the Month Ended August 31 Revenue Expenses: Cleaning supplies Electricity Maintenance Wages and salaries Depreciation Rent Administrative expenses Total expense Net operating income
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 Electricity $0.50 $0.06 $0.25 $0.40 $1,400 Maintenance Wages and salaries Depreciation Rent Administrative expenses $4,500 $8, 300 $2,100 $1,500 $0.03 For example, electricity costs are $1,400 per month plus $0.06 per car washed. The company expects to wash 8,200 cars in August and to collect an average of $6.30 per car washed. The company actually washed 8,300 cars in August. Required: Calculate the company's 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.) Required: Calculate the company's 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 Activity Variances For the Month Ended August 31 Revenue Expenses: Cleaning supplies Electricity Maintenance Wages and salaries Depreciation Rent Administrative expenses Total expense Net operating income
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 1PB: Classify costs Cromwell Furniture Company manufactures sofas for distribution to several major...
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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
per Month
Cost per
Car Washed
Cleaning supplies
Electricity
$0.50
$0.06
$0.25
$0.40
$1,400
Maintenance
Wages and salaries
Depreciation
Rent
Administrative expenses
$4,500
$8, 300
$2,100
$1,500
$0.03
For example, electricity costs are $1,400 per month plus $0.06 per car washed. The company expects to wash 8,200 cars in August
and to collect an average of $6.30 per car washed. The company actually washed 8,300 cars in August.
Required:
Calculate the company's 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.)
Transcribed Image Text:Required:
Calculate the company's 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
Activity Variances
For the Month Ended August 31
Revenue
Expenses:
Cleaning supplies
Electricity
Maintenance
Wages and salaries
Depreciation
Rent
Administrative expenses
Total expense
Net operating income
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