Lavage Rapide is a Canadian company that owns and operates a large automatic car wash facility near
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Question:
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 | $ 0.70 | |
Electricity | $ 1,000 | $ 0.09 |
Maintenance | $ 0.25 | |
Wages and salaries | $ 4,500 | $ 0.30 |
Depreciation | $ 8,500 | |
Rent | $ 2,200 | |
Administrative expenses | $ 1,700 | $ 0.03 |
For example, electricity costs are $1,000 per month plus $0.09 per car washed. The company expects to wash 8,400 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 | 8,500 |
---|---|
Revenue | $ 59,220 |
Expenses: | |
Cleaning supplies | 6,380 |
Electricity | 1,726 |
Maintenance | 2,340 |
Wages and salaries | 7,380 |
Depreciation | 8,500 |
Rent | 2,400 |
Administrative expenses | 1,852 |
Total expense | 30,578 |
Net operating income | $ 28,642 |
Required:
Calculate the company's revenue and spending variances for August.
Related Book For
Managerial Accounting
ISBN: 978-0697789938
13th Edition
Authors: Ray H. Garrison, Eric W. Noreen, Peter C. Brewer
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