60.1K

Verified Solution

Link Copied!

Auto Lavage is a Canadian company that owns and operates a large automatic carwash facility near Quebec. The following table provides data concerning the companys costs:

Fixed Cost per Month

Cost per Car Washed

Cleaning supplies				$	0.40
Electricity	$	1,300		$	0.08
Maintenance				$	0.10
Wages and salaries	$	4,600		$	0.20
Depreciation	$	8,200
Rent	$	2,100
Administrative expenses	$	1,600		$	0.01

For example, electricity costs are $1,300 per month plus $0.08 per car washed. The company expects to wash 8,200 cars in October and to collect an average of $5.90 per car washed.

The actual operating results for October appear below:

Auto Lavage Income Statement For the Month Ended October 31
Actual cars washed		8,300
Revenue	$	50,480
Expenses:
Cleaning supplies		3,780
Electricity		1,926
Maintenance		1,060
Wages and salaries		6,600
Depreciation		8,200
Rent		2,300
Administrative expenses		1,582
Total expense		25,448
Net operating income	$	25,032

Required:

Complete the flexible budget performance report that shows the companys activity variances and revenue and spending variances for October. (Input all amounts as positive values. Leave no cells blank - be certain to enter "0" wherever required. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Omit the "$" sign in your response.)

Auto Lavage Flexible Budget Performance Report For the Month Ended October 31
	Activity Variances		Revenue and Spending Variances
Revenue	$	(Click to select)FNoneU	$	(Click to select)FNoneU
Expenses:
Cleaning supplies		(Click to select)FUNone		(Click to select)NoneFU
Electricity		(Click to select)FNoneU		(Click to select)NoneFU
Maintenance		(Click to select)UFNone		(Click to select)UFNone
Wages and salaries		(Click to select)FNoneU		(Click to select)FUNone
Depreciation		(Click to select)FUNone		(Click to select)NoneUF
Rent		(Click to select)UNoneF		(Click to select)FUNone
Administrative expenses		(Click to select)FNoneU		(Click to select)FNoneU
Total expense		(Click to select)NoneUF		(Click to select)NoneFU
Net operating income	$	(Click to select)UNoneF	$	(Click to select)UNoneF

Answer & Explanation Solved by verified expert

See Answer