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Lavage Rapide is a Canadian company that owns and operates a large automatic carwash facility near...

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Accounting

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

Fixed Cost Per MonthCost Per Car Washed
Cleaning Supplies.40
Electricity1,100.07
Maintenance.15
Wages And Salary4,700.30
Depreciation8,300
Rent2,000
Admin Exp.1,600.05

For example, electricity costs are $1,100 per month plus $0.07per car washed. The company expected to wash 8,200 cars in Augustand to collect an average of $6.60 per car washed. The companyactually washed 8,300 cars.

The actual operating results for August appear below.

  

Lavage Rapide
Income Statement
For the Month Ended August 31
Actual cars washed8,300
Revenue$56,220
Expenses:
Cleaning supplies3,780
Electricity1,644
Maintenance1,470
Wages and salaries7,520
Depreciation8,300
Rent2,200
Administrative expenses1,910
Total expense26,824
Net operating income$29,396

Compute the company's activity variances for August.(Indicate the effect of each variance by selecting "F" forfavorable, "U" for unfavorable, and "None" for no effect (i.e.,zero variance). Input all amounts as positive values.)

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Answer-

Lavage Rapide
Revenue & Spending Variances
For the month ended August 31
Particulars Flexible Budget Actual Results Variances Remark
$ $ $
Revenue 8300 car washed*$6.60 per car washed 54780 56220 1440 Favourable
Less:-Expenses
Cleaning expenses 8300 car washed*$.40 per car washed 3320 3780 -460 Unfavourable
Electricity (8300 car washed*$.07 per car washed)+$1100 1681 1644 37 Favourable
Maintenance 8300 car washed*$.15 per car washed 1245 1470 -225 Unfavourable
Wages & salaries (8300 car washed*$.30 per car washed)+$4700 7190 7520 -330 Favourable
Depreciation 8300 8300 0 None
Rent 2000 2200 -200 Unfavourable
Administrative expenses (8300 car washed*$.05 per car washed)+$1600 2015 1910 105 Favourable
Income from operations 29029 29396 367 Favourable

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