Chec Exercise 9-13 Revenue and Spending Variances [LO9-3] Lavage Rapide is a Can

Question

Chec Exercise 9-13 Revenue and Spending Variances [LO9-3] 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 Cleaning supplies Electricity Maintenance Wages and salaries Depreciation Rent Administrative expenses Cost per Car Washed 0.40 $0.07 $0.25 $0.30 $1,300 $4,100 $8,100 $2,000 $1,500 $0.84 For example, electricity costs are $1,300 per month plus $0.07 per car washed. The company expects to wash 8.300 cars in August and to collect an average of $6.50 per car washed. The actual operating results for August appear below Lavage Rapide Income Statement For the Month Ended August 31 Actual cars washed 8,400 s 56.050 Revenue Evnencac. K Prev 6 of 6 N

Explanation / Answer

Revenue and spending variance Actual Flexible Variance(Actual -flexible) Revenue 56050 8400*6.5=54600 1450 F expenses Cleaning supplies 3820 8400*.40=3360 460 U Electricity 1851 1888      [1300+(8400*.07)] 37 F Maintenance 2315 2100      [.25*8400] 215U wages and salaries 6950 6620     [(.3*8400)+4100] 330 U Depreciation 8100 8100 0 NA Rent 2200 2000 200 U Administrative expense 1732 1836    [(.04*8400)+1500] 104 F Total expense 26968 25904 1064 U Net Income 29082 28696 386 F

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