Required:

1. Prepare flexible budget performance report for October. (Indicate the effect of each variance by selecting "F" for favourable, "U" for unfavourable, and "None" for no effect (i.e., zero variance).)

2. Prepare comprehensive performance report for October. Assume that the static budget for October was based on an activity level of 9,500 cars. (Indicate the effect of each variance by selecting "F" for favourable, "U" for unfavourable, and "None" for no effect (i.e., zero variance).)

Auto Lavage is a Canadian company that owns and operates a large automatic carwash facility near Quebec. The following table provides data concerning the company's expected costs: Fixed Cost per Month Cost per Car Washed $ 0.90 0.30 0.50 0.60 $ Cleaning supplies Electricity Maintenance Wages and salaries Depreciation Rent Administrative expenses 3,050 6,200 9,800 3,600 3,300 0.09 For example, electricity costs are $3,050 per month plus $0.30 per car washed. The company expects to wash 9,500 cars in October and to collect an average of $7.40 per car washed. Auto Lavage's actual level of activity was 9,600 cars. The actual revenues and expenses for October are given below: Auto Lavage Income Statement For the Month Ended October 31 Actual cars washed 9,600 Sales $73,400 8,850 2,965 4,600 6,105 910 Variable expenses: Cleaning supplies Electricity Maintenance Wages and salaries Administrative Fixed expenses: Electricity Wages and salaries Depreciation Rent Administrative 3,100 6,200 9,800 3,600 3,245 Total expense 49,375 Net operating income $24,025