Lavage Rapide 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 $ 0.60 Electricity $ 1,200 $ 0.07 Maintenance $ 0.15 Wages and salaries $ 4,700 $ 0.40 Depreciation $ 8,500 Rent $ 2,000 Administrative expenses $ 1,700 $ 0.04 For example, electricity costs should be $1,200 per month plus $0.07 per car washed. The company expects to wash 8,500 cars in August and to collect an average of $6.20 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 8,600 Revenue $ 54,800 Expenses: Cleaning supplies 5,600 Electricity 1,765 Maintenance 1,515 Wages and salaries 8,460 Depreciation 8,500 Rent 2,200 Administrative expenses 1,940 Total expenses 29,980 Net operating income $ 24,820 Required: Prepare a flexible budget performance report for August. Note: 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. please answer do not image.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Lavage Rapide 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		$ 0.60
Electricity	$ 1,200	$ 0.07
Maintenance		$ 0.15
Wages and salaries	$ 4,700	$ 0.40
Depreciation	$ 8,500
Rent	$ 2,000
Administrative expenses	$ 1,700	$ 0.04

For example, electricity costs should be $1,200 per month plus $0.07 per car washed. The company expects to wash 8,500 cars in August and to collect an average of $6.20 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	8,600
Revenue	$ 54,800
Expenses:
Cleaning supplies	5,600
Electricity	1,765
Maintenance	1,515
Wages and salaries	8,460
Depreciation	8,500
Rent	2,200
Administrative expenses	1,940
Total expenses	29,980
Net operating income	$ 24,820

Required:

Prepare a flexible budget performance report for August.

Note: 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.

please answer do not image.

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