Lavage Rapide is a Canadian company that owns and operates a

Lavage Rapide is a Canadian company that owns and operates a large automatic carwash facility near Montreal. The following table provides data concerning the company’s costs:

For example, electricity costs are $1,300 per month plus $0.10 per car washed. The company expects to wash 8,100 cars in August and to collect an average of $6.00 per car washed.

  

The actual operating results for August appear below.

  

NEED TO FILL IN:

Required:

Complete the flexible budget performance report that shows the company’s activity variances and revenue and spending 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.)

Revenue and Spending Variances Activity Variances

Revenue

Expenses:Cleaning supplies

Electricity

Maintenance

Wages and salaries

Depreciation

Rent

Administrative expenses

Total expense

Net operating income

	Fixed Cost per Month		Cost per Car Washed
Cleaning supplies				$	0.50
Electricity	$	1,300		$	0.10
Maintenance				$	0.15
Wages and salaries	$	4,300		$	0.40
Depreciation	$	8,500
Rent	$	2,000
Administrative expenses	$	1,400		$	0.05

Solution

Actual Revenue and spending variances Flexible budget Activity variances Planning budget Cars washed 8200 8200 8100 Revenue 50700 1500 F 49200 600 F 48600 Expenses: Cleaning supplies 4550 450 U 4100 50 U 4050 Electricity 2080 40 F 2120 10 U 2110 Maintenance 1455 225 U 1230 15 U 1215 Wages and salaries 7900 320 U 7580 40 U 7540 Depreciation 8500 0 None 8500 0 None 8500 Rent 2200 200 U 2000 0 None 2000 Administrative expenses 1705 105 F 1810 5 U 1805 Total expenses 28390 1050 U 27340 120 U 27220 Net operating income 22310 450 F 21860 480 F 21380