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Exercise 9-14 Prepare a Flexible Budget Performance Report [LO9-4]

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 companys costs:

	Fixed Cost per Month			Cost per Car Washed
Cleaning supplies				$	0.40
Electricity	$	1,300		$	0.07
Maintenance				$	0.20
Wages and salaries	$	4,800		$	0.30
Depreciation	$	8,400
Rent	$	1,800
Administrative expenses	$	1,600		$	0.05

For example, electricity costs are $1,300 per month plus $0.07 per car washed. The company expects to wash 8,500 cars in August and to collect an average of $6.00 per car washed.

The actual operating results for August appear below.

Lavage Rapide
Income Statement
For the Month Ended August 31
Actual cars washed		8,600
Revenue	$	53,100
Expenses:
Cleaning supplies		3,900
Electricity		1,865
Maintenance		1,940
Wages and salaries		7,710
Depreciation		8,400
Rent		2,000
Administrative expenses		1,925
Total expense		27,740
Net operating income	$	25,360

Required:

Prepare a flexible budget performance report that shows the companys revenue and spending variances and activity variances for August. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.)

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