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Auto Lavage is a Canadian company that owns and operates a large automatic carwash facility near Quebec. The following table provides data concerning the company%u2019s costs: |
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Fixed Cost per Month |
Cost per Car Washed |
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Cleaning supplies |
$ |
0.40 |
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Electricity |
$ |
1,450 |
$ |
0.10 |
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Maintenance |
$ |
0.40 |
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Wages and salaries |
$ |
3,700 |
$ |
0.40 |
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Depreciation |
$ |
6,900 |
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Rent |
$ |
2,100 |
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Administrative expenses |
$ |
2,000 |
$ |
0.05 |
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For example, electricity costs are $1,450 per month plus $0.10 per car washed. The company expects to wash 9,500 cars in October and to collect an average of $4.90 per car washed. The company actually washed 9,620 cars in October. |
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The actual operating results for October appear below: |
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Auto Lavage Income Statement For the Month Ended October 31 |
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Actual cars washed |
9,620 |
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Revenue |
$ |
48,453 |
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Expenses: |
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Cleaning supplies |
4,228 |
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Electricity |
2,377 |
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Maintenance |
4,108 |
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Wages and salaries |
7,878 |
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Depreciation |
6,900 |
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Rent |
2,300 |
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Administrative expenses |
2,326 |
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Total expense |
30,117 |
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Net operating income |
$ |
18,336 |
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Required: |
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Prepare a report showing revenue and spending variances. (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).) |
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Auto Lavage Revenue and Spending Variances For the Month Ended October 31 |
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Flexible Budget |
Actual Results |
Revenue and Spending Variances |
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Revenue |
$ |
$ |
$ |
(Click to select)NoneFU |
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Expenses: |
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Cleaning supplies |
(Click to select)UFNone |
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Electricity |
(Click to select)FNoneU |
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Maintenance |
(Click to select)NoneUF |
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Wages and salaries |
(Click to select)UNoneF |
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Depreciation |
(Click to select)UFNone |
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Rent |
(Click to select)NoneFU |
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Administrative expenses |
(Click to select)FNoneU |
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Total expense |
(Click to select)NoneFU |
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Net operating income |
$ |
$ |
$ |
(Click to select)FUNone |
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