Lavage Rapide is a Canadian company that owns and operates a large automatic car wash...
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Lavage Rapide is a Canadian company that owns and operates a large automatic car wash facility near Montreal. The following table provides estimates concerning the companys costs: Fixed Cost per Month Cost per Car Washed Cleaning supplies $ 0.60 Electricity $ 1,100 $ 0.08 Maintenance $ 0.25 Wages and salaries $ 4,400 $ 0.20 Depreciation $ 8,400 Rent $ 2,000 Administrative expenses $ 1,700 $ 0.04 For example, electricity costs should be $1,100 per month plus $0.08 per car washed. The company expects to wash 8,500 cars in August and to collect an average of $6.40 per car washed. The actual operating results for August are as follows: Lavage Rapide Income Statement For the Month Ended August 31 Actual cars washed 8,600 Revenue $ 56,500 Expenses: Cleaning supplies 5,600 Electricity 1,750 Maintenance 2,365 Wages and salaries 6,460 Depreciation 8,400 Rent 2,200 Administrative expenses 1,940 Total expense 28,715 Net operating income $ 27,785
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