Exercise 9-11 Prepare a Report Showing Activity Variances [LO2]

Auto Lavage is a Canadian company that owns and operates a large automatic carwash facility near Quebec. The following table provides data concerning the companys costs:

Fixed Cost per Month

Cost per Car Washed

Cleaning supplies				$	0.50
Electricity	$	1,000		$	0.06
Maintenance				$	0.25
Wages and salaries	$	4,900		$	0.30
Depreciation	$	8,400
Rent	$	2,200
Administrative expenses	$	1,400		$	0.04

For example, electricity costs are $1,000 per month plus $0.06 per car washed. The company expects to wash 8,300 cars in October and to collect an average of $6.70 per car washed.

The actual operating results for October appear below:

Auto Lavage Income Statement For the Month Ended October 31
Actual cars washed		8,400
Revenue	$	57,710
Expenses:
Cleaning supplies		4,650
Electricity		1,468
Maintenance		2,315
Wages and salaries		7,750
Depreciation		8,400
Rent		2,400
Administrative expenses		1,632
Total expense		28,615
Net operating income	$	29,095

Required:

Compute the company's activity variances for October. (Input all amounts as positive values. Leave no cells blank - be certain to enter "0" wherever required. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Omit the "$" sign in your response.)

Auto Lavage Activity Variances For the Month Ended October 31
Revenue	$	(Click to select)FUNone
Expenses:
Cleaning supplies		(Click to select)FNoneU
Electricity		(Click to select)NoneUF
Maintenance		(Click to select)UNoneF
Wages and salaries		(Click to select)NoneUF
Depreciation		(Click to select)UNoneF
Rent		(Click to select)UNoneF
Administrative expenses		(Click to select)FUNone
Total expense		(Click to select)FUNone
Net operating income	$	(Click to select)NoneFU