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Lavage Rapide is a Canadian company that owns and operates a large automatic car wash facility...

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 $ 0.40
Electricity $ 1,200 $ 0.06
Maintenance $ 0.10
Wages and salaries $ 4,800 $ 0.30
Depreciation $ 8,300
Rent $ 2,100
Administrative expenses $ 1,500 $ 0.01

For example, electricity costs are $1,200 per month plus $0.06 per car washed. The company expects to wash 8,000 cars in August and to collect an average of $6.20 per car washed.

The actual operating results for August appear below.

Lavage Rapide
Income Statement
For the Month Ended August 31
Actual cars washed 8,100
Revenue $ 51,700
Expenses:
Cleaning supplies 3,700
Electricity 1,650
Maintenance 1,040
Wages and salaries 7,560
Depreciation 8,300
Rent 2,300
Administrative expenses 1,480
Total expense 26,030
Net operating income $ 25,670

Required:

Prepare a flexible budget performance report that shows the company’s revenue and spending variances and activity 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.)

Lavage Rapide
Flexible Budget Performance Report
For the Month Ended August 31
Actual Results Flexible Budget Planning Budget
Cars washed 8,100
Revenue $51,700
Expenses:
Cleaning supplies 3,700
Electricity 1,650
Maintenance 1,040
Wages and salaries 7,560
Depreciation 8,300
Rent 2,300
Administrative expenses 1,480
Total expense 26,030
Net operating income $25,670

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