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 data concerning the companys costs: Fixed Cost per Month Cost per Car Washed Cleaning supplies $ 0.80 Electricity $ 1,300 $ 0.06 Maintenance $ 0.15 Wages and salaries $ 4,600 $ 0.40 Depreciation $ 8,400 Rent $ 1,900 Administrative expenses $ 1,600 $ 0.03 For example, electricity costs are $1,300 per month plus $0.06 per car washed. The company expects to wash 8,200 cars in August and to collect an average of $6.10 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 8,300 Revenue $ 52,120 Expenses: Cleaning supplies 7,060 Electricity 1,762 Maintenance 1,470 Wages and salaries 8,240 Depreciation 8,400 Rent 2,100 Administrative expenses 1,746 Total expense 30,778 Net operating income $ 21,342
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