Question

In: Accounting

Exercise 9-13 Revenue and Spending Variances [LO9-3] Lavage Rapide is a Canadian company that owns and...

Exercise 9-13 Revenue and Spending Variances [LO9-3]

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 company’s costs:

Fixed Cost
per Month
Cost per
Car Washed
Cleaning supplies $ 0.50
Electricity $ 1,000 $ 0.09
Maintenance $ 0.25
Wages and salaries $ 4,300 $ 0.20
Depreciation $ 8,500
Rent $ 1,900
Administrative expenses $ 1,600 $ 0.03

For example, electricity costs are $1,000 per month plus $0.09 per car washed. The company expects to wash 8,500 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 8,600
Revenue $ 53,950
Expenses:
Cleaning supplies 4,750
Electricity 1,735
Maintenance 2,365
Wages and salaries 6,360
Depreciation 8,500
Rent 2,100
Administrative expenses 1,755
Total expense 27,565
Net operating income $ 26,385

Required:

Calculate the company's revenue and spending 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.)

Solutions

Expert Solution

Solution

Lavage Rapide
Revenues and Spending Variance
For the Month ended August 31
Revenue $ 1,490.00 F
Expenses:
Cleaning supplies $ 450.00 U
Electricity $ 39.00 F
Maintenance $ 215.00 U
Wages and salaries $ 340.00 U
Depreciation $ 0.00 None
Rent $ 200.00 U
Administrative expenses $ 103.00 F
Total Expenses $ 1,063.00 U
Net Operating Income $ 427.00 F

Working

Units (A) Fixed cost (B) Variable cost per unit © Flexible cost and revenue (D=(A x C) +B)
Revenue 8600 $                 -   $          6.10 $     52,460.00
Expenses: 8600
Cleaning supplies 8600 $          0.50 $       4,300.00
Electricity 8600 $    1,000.00 $          0.09 $       1,774.00
Maintenance 8600 $          0.25 $       2,150.00
Wages and salaries 8600 $    4,300.00 $          0.20 $       6,020.00
Depreciation 8600 $    8,500.00 $       8,500.00
Rent 8600 $    1,900.00 $       1,900.00
Administrative expenses 8600 $    1,600.00 $          0.03 $       1,858.00
Total Expenses $     26,502.00
Net Operating Income $     25,958.00

Related Solutions

Exercise 9-13 Revenue and Spending Variances [LO9-3] Lavage Rapide is a Canadian company that owns and...
Exercise 9-13 Revenue and Spending Variances [LO9-3] 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 company’s costs: Fixed Cost per Month Cost per Car Washed Cleaning supplies $ 0.60 Electricity $ 1,100 $ 0.07 Maintenance $ 0.20 Wages and salaries $ 4,400 $ 0.40 Depreciation $ 8,200 Rent $ 2,000 Administrative expenses $ 1,700 $ 0.05 For example, electricity costs are $1,100 per...
Exercise 9-9 Prepare a Report Showing Revenue and Spending Variances [LO9-2] Lavage Rapide is a Canadian...
Exercise 9-9 Prepare a Report Showing Revenue and Spending Variances [LO9-2] 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 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...
Exercise 9-12 Activity Variances [LO9-2] Lavage Rapide is a Canadian company that owns and operates a...
Exercise 9-12 Activity Variances [LO9-2] 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 company’s costs: Fixed Cost per Month Cost per Car Washed Cleaning supplies $ 0.70 Electricity $ 1,000 $ 0.10 Maintenance $ 0.15 Wages and salaries $ 4,100 $ 0.20 Depreciation $ 8,100 Rent $ 1,800 Administrative expenses $ 1,500 $ 0.02 For example, electricity costs are $1,000 per month plus...
Exercise 9-11 Flexible Budget [LO9-1] Lavage Rapide is a Canadian company that owns and operates a...
Exercise 9-11 Flexible Budget [LO9-1] 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 company’s costs: Fixed Cost per Month Cost per Car Washed Cleaning supplies $ 0.70 Electricity $ 1,400 $ 0.07 Maintenance $ 0.10 Wages and salaries $ 4,000 $ 0.30 Depreciation $ 8,400 Rent $ 1,900 Administrative expenses $ 1,800 $ 0.04 For example, electricity costs are $1,400 per month plus...
Exercise 9-10 Planning Budget [LO9-1] Lavage Rapide is a Canadian company that owns and operates a...
Exercise 9-10 Planning Budget [LO9-1] 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 company’s costs: Fixed Cost per Month Cost per Car Washed Cleaning supplies $ 0.80 Electricity $ 1,400 $ 0.08 Maintenance $ 0.25 Wages and salaries $ 4,500 $ 0.40 Depreciation $ 8,300 Rent $ 2,100 Administrative expenses $ 1,400 $ 0.02 For example, electricity costs are $1,400 per month plus...
Exercise 9-14 Prepare a Flexible Budget Performance Report [LO9-4] Lavage Rapide is a Canadian company that...
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 company’s costs: Fixed Cost per Month Cost per Car Washed Cleaning supplies $ 0.80 Electricity $ 1,200 $ 0.09 Maintenance $ 0.15 Wages and salaries $ 4,500 $ 0.40 Depreciation $ 8,200 Rent $ 1,800 Administrative expenses $ 1,600 $ 0.02 For example, electricity costs are...
Exercise 9-14 (Algo) Prepare a Flexible Budget Performance Report [LO9-4] Lavage Rapide is a Canadian company...
Exercise 9-14 (Algo) 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 company’s costs: Fixed Cost per Month Cost per Car Washed Cleaning supplies $ 0.60 Electricity $ 1,100 $ 0.10 Maintenance $ 0.15 Wages and salaries $ 4,900 $ 0.30 Depreciation $ 8,100 Rent $ 2,200 Administrative expenses $ 1,800 $ 0.03 For example, electricity costs...
Exercise 9-16 Flexible Budgets and Revenue and Spending Variances [LO9-1, LO9-3] Via Gelato is a popular...
Exercise 9-16 Flexible Budgets and Revenue and Spending Variances [LO9-1, LO9-3] Via Gelato is a popular neighborhood gelato shop. The company has provided the following cost formulas and actual results for the month of June: Fixed Element per Month Variable Element per Liter Actual Total for June Revenue $ 12.00 $ 71,540 Raw materials $ 4.65 $ 29,230 Wages $ 5,600 $ 1.40 $ 13,860 Utilities $ 1,630 $ 0.20 $ 3,270 Rent $ 2,600 $ 2,600 Insurance $ 1,350...
ch8 exer #3 Lavage Rapide is a Canadian company that owns and operates a large automatic...
ch8 exer #3 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         $ 0.70        Electricity   $ 1,500      $ 0.09        Maintenance         $ 0.25        Wages and salaries   $ 4,000      $ 0.20        Depreciation   $ 8,400              Rent   $ 2,000              Administrative expenses   $ 1,500      $ 0.03         For example, electricity costs are $1,500 per...
Exercise 9-2 Prepare a Report Showing Revenue and Spending Variances [LO9-2] Quilcene Oysteria farms and sells...
Exercise 9-2 Prepare a Report Showing Revenue and Spending Variances [LO9-2] Quilcene Oysteria farms and sells oysters in the Pacific Northwest. The company harvested and sold 7,900 pounds of oysters in August. The company’s flexible budget for August appears below: Quilcene Oysteria Flexible Budget For the Month Ended August 31 Actual pounds (q) 7,900 Revenue ($4.10q) $ 32,390 Expenses: Packing supplies ($0.30q) 2,370 Oyster bed maintenance ($3,300) 3,300 Wages and salaries ($2,000 + $0.30q) 4,370 Shipping ($0.60q) 4,740 Utilities ($1,220)...
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT