Lavage Rapide is a Canadian company that owns and operates a large automatic carwash facility near Montreal. The following table provides data concerning the company’s costs:
|
|
Fixed Cost per Month |
Cost per Car Washed |
|
Cleaning supplies |
|
$0.80 |
|
Electricity |
$1,200 |
$0.15 |
|
Maintenance |
|
$0.20 |
|
Wages and salaries |
$5,000 |
$0.30 |
|
Depreciation |
$6,000 |
|
|
Rent |
$8,000 |
|
|
Administrative expenses |
$4,000 |
$0.10 |
For example, electricity costs are $1,200 per month plus $0.15 per car washed. The company expects to wash 9,000 cars in August and to collect an average of $4.90 per car washed.
Required: Prepare the company’s planning budget for August.