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 |
|
$0.80 |
| Electricity |
$1,200 |
$0.15 |
| Maintenance |
|
$0.20 |
| Wages and salaries |
$5,000 |
$0.30 |
| Depreciation |
$6,000 |
|
| Rent |
$8,000 |
|
| Administrative expenses |
$4,000 |
$0.10 |
|
|
For example, electricity costs are $1,200 per month plus $0.15 per car washed. The company expects to wash 9,000 cars in August and to collect an average of $4.90 per car washed.
|
| The actual operating results for August appears below. |
Lavage Rapide
Income Statement
For the Month Ended August 31 |
| Actual cars washed |
8,800 |
| Revenue |
$43,080 |
|
|
| Expenses: |
|
| Cleaning supplies |
7,560 |
| Electricity |
2,670 |
| Maintenance |
2,260 |
| Wages and salaries |
8,500 |
| Depreciation |
6,000 |
| Rent |
8,000 |
| Administrative expenses |
4,950 |
|
|
| Total expense |
39,940 |
|
|
| Net operating income |
3,140 |
|
|
|
| Required: |
|
Prepare a report showing the company's activity variances for August.
|