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:
Fixed Cost Per Month Cost per Car Washed
Cleaning supplies $.74
Electricity $1,090 $.15
Maintenance $.10
Wages and salaries $3,800 $.14
Depreciation $5,400
Rent $6,800
Administrative expenses $3,800 $.07
For example, electricity costs are $1,090 per month plus $.15 per car washed. The company expects to wash 9,600 cars in August and to collect an average of $5.70 per car washed.
The actual operating results for August appears below.
Lavage Rapide Income Statement For the Month Ended August 31
Actual cars washed $9,700
Revenue $62,000
Expenses:
Cleaning supplies 6,800
Electricity 1,870
Maintenance 2,060
Wages and salaries 8,200
Depreciation 5,400
Rent 6,800
Administrative expenses 4,450
Total expense: 35,580
Net operating income: 26,420
1. Prepare a report showing the company's activity variances for August. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect.