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 | $ | 0.25 | |||||
| Wages and salaries | $ | 4,800 | $ | 0.30 | |||
| Depreciation | $ | 8,100 | |||||
| Rent | $ | 2,000 | |||||
| Administrative expenses | $ | 1,600 | $ | 0.03 | |||
For example, electricity costs are $1,200 per month plus $0.09 per car washed. The company expects to wash 8,200 cars in August and to collect an average of $5.90 per car washed.
The actual operating results for August appear below.
| Lavage Rapide | ||
| Income Statement | ||
| For the Month Ended August 31 | ||
| Actual cars washed | 8,300 | |
| Revenue | $ | 50,480 |
| Expenses: | ||
| Cleaning supplies | 7,060 | |
| Electricity | 1,908 | |
| Maintenance | 2,290 | |
| Wages and salaries | 7,620 | |
| Depreciation | 8,100 | |
| Rent | 2,200 | |
| Administrative expenses | 1,746 | |
| Total expense | 30,924 | |
| Net operating income | $ | 19,556 |
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.)
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In: Accounting
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 | $ | 0.40 | |||
| Electricity | $ | 1,300 | $ | 0.08 | |
| Maintenance | $ | 0.20 | |||
| Wages and salaries | $ | 4,400 | $ | 0.30 | |
| Depreciation | $ | 8,300 | |||
| Rent | $ | 1,800 | |||
| Administrative expenses | $ | 1,400 | $ | 0.02 | |
For example, electricity costs are $1,300 per month plus $0.08 per car washed. The company expected to wash 8,200 cars in August and to collect an average of $6.60 per car washed. The company actually washed 8,300 cars.
The actual operating results for August appear below.
|
Lavage Rapide Income Statement For the Month Ended August 31 |
||
| Actual cars washed | 8,300 | |
| Revenue | $ | 56,220 |
| Expenses: | ||
| Cleaning supplies | 3,780 | |
| Electricity | 1,926 | |
| Maintenance | 1,880 | |
| Wages and salaries | 7,220 | |
| Depreciation | 8,300 | |
| Rent | 2,000 | |
| Administrative expenses | 1,464 | |
| Total expense | 26,570 | |
| Net operating income | $ | 29,650 |
Required:
Compute the company's 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.)
|
Auto Lavage Activity Variances For the Month Ended October 31 |
||
| Revenue | $ | |
| Expenses: | ||
| Cleaning supplies | ||
| Electricity | ||
| Maintenance | ||
| Wages and salaries | ||
| Depreciation | ||
| Rent | ||
| Administrative expenses | ||
| Total expense | ||
| Net operating income | $ | |
In: Accounting
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 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.
The actual operating results for August appear below.
| Lavage Rapide | ||
| Income Statement | ||
| For the Month Ended August 31 | ||
| Actual cars washed | 8,800 | |
| Revenue | $ | 43,080 |
| Expenses: | ||
| Cleaning supplies | 7,560 | |
| Electricity | 2,670 | |
| Maintenance | 2,260 | |
| Wages and salaries | 8,500 | |
| Depreciation | 6,000 | |
| Rent | 8,000 | |
| Administrative expenses | 4,950 | |
| Total expense | 39,940 | |
| Net operating income | $ | 3,140 |
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.)
| Revenue | U | |
| Expenses: | ||
| Cleaning Supplies | U | |
| Electricity | U | |
| Maintenance | U | |
| Wages and Salaries | U | |
| Depreciation | None | |
| Rent | None | |
| Administrative Expenses | U | |
| Total Expenses | U | |
| Net Operating Income | U |
In: Accounting
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 | $ | 1,100 | $ | 0.07 | |
| Maintenance | $ | 0.30 | |||
| Wages and salaries | $ | 4,900 | $ | 0.20 | |
| Depreciation | $ | 8,100 | |||
| Rent | $ | 1,800 | |||
| Administrative expenses | $ | 1,300 | $ | 0.05 | |
For example, electricity costs are $1,100 per month plus $0.07 per car washed. The company expected to wash 8,200 cars in August and to collect an average of $6.60 per car washed. The company actually washed 8,300 cars.
The actual operating results for August appear below.
| Lavage Rapide Income Statement For the Month Ended August 31 |
||
| Actual cars washed | 8,300 | |
| Revenue | $ | 56,220 |
| Expenses: | ||
| Cleaning supplies | 7,060 | |
| Electricity | 1,644 | |
| Maintenance | 2,700 | |
| Wages and salaries | 6,900 | |
| Depreciation | 8,100 | |
| Rent | 2,000 | |
| Administrative expenses | 1,610 | |
| Total expense | 30,014 | |
| Net operating income | $ | 26,206 |
Required:
Compute the company's 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.)
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In: Accounting
1. Alicia is the owner-operator of Cool Beans, a local coffee shop. For the past year, Cool Beans sold 215,000 drinks at an average price of $2.95 per serving. Her average variable cost per serving was $1.15. Currently, she has been using local TV and newspapers to generate interest and awareness at a cost of $171,000 per year. She recently contacted Brushfire Social Media and they estimated they could reach the same number of people in her community with a social media budget at half the cost, though it would require an additional one-time investment of $14,000 in their website and social platforms. As an additional option, Brushfire suggested a separate promotional campaign that would offer a $1 discount to any person who likes their social media page. Brushfire estimates that Cool Beans would sell an additional 5,900 cups with this discount and this new campaign would cost $2,500.
1. What is the Marketing ROI for the Brushfire website and social media plan compared to their current approach? ___ %
2. SleepItOff Properties is a West Coast company that owns and operates several hotel chains. Here is their partially completed income statement for the most recent fiscal year. Matt Tress, a summer intern for the finance team was asked to calculate some basic performance metrics as part of his training. He also was told that the company had $15 million in cash and $206 million of other assets. For Year Ending Dec 31, 2013 $Mill Total Revenue $88 Cost of Revenue $31 Gross Profit ? General, Selling and Admin $20 Depreciation $10 Operating Income or Loss ? Interest Expense $15 Pre-Tax Income ? Income Taxes ? Net Income ? If SleepItOff's Tax Rate is 30%
2. What is SleepItOff's Net Income?
In: Finance
8.4 An airline is choosing between two engine systems for its planes. Each has the same useful life and the same repair record and maintenance costs.
? System A costs US$2 million and uses 30,000 gallons per 1,000 hours of operation at the average load of passenger service.
? System B costs US$3 million and uses 20,000 gallons per 1,000 hours of operation at the same level of passenger service.
In addition, the following information is relevant to both engine systems:
? Both systems have four-year lives before any major overhaul is required. At the end of the fourth year, each system has a salvage value equal to 10% of its initial investment.
? The fuel consumption of both systems is expected to increase at a rate of 5% per year because of degrading engine efficiency.
? The price of jet fuel on 31 March 2017 was US$15 per gallon. The airline will use this price to evaluate the two systems.
? The airline will assume 2,000 hours of operation per year and use a MARR of 10%.
Use the annual worth (AW) method to compare the two engine systems. Which one should the airline choose? Explain your answers in the following steps:
a) Calculate the annual equivalent cost of fuel (AWA(10%)fuel) for System A.
b) Calculate the total annual equivalent cost (AWA(10%)) of System A.
c) Calculate the annual equivalent cost of fuel (AWB(10%)fuel) for System B.
d) Calculate the total annual equivalent cost (AWB(10%)) of System B.
e) State your conclusion.
f) If the airline expects the price of jet fuel to rise significantly in the near future, will it make the same choice? Explain your answer briefly without any calculation.
In: Economics
8.4 An airline is choosing between two engine systems for its planes. Each has the same useful life and the same repair record and maintenance costs.
System A costs US$2 million and uses 30,000 gallons per 1,000 hours of operation at the average load of passenger service.
System B costs US$3 million and uses 20,000 gallons per 1,000 hours of operation at the same level of passenger service.
In addition, the following information is relevant to both engine systems:
Both systems have four-year lives before any major overhaul is required. At the end of the fourth year, each system has a salvage value equal to 10% of its initial investment.
The fuel consumption of both systems is expected to increase at a rate of 5% per year because of degrading engine efficiency.
The price of jet fuel on 31 March 2017 was US$15 per gallon. The airline will use this price to evaluate the two systems.
The airline will assume 2,000 hours of operation per year and use a MARR of 10%.
Use the annual worth (AW) method to compare the two engine systems. Which one should the airline choose? Explain your answers in the following steps:
a) Calculate the annual equivalent cost of fuel (AWA(10%)fuel) for System A.
b) Calculate the total annual equivalent cost (AWA(10%)) of System A.
c) Calculate the annual equivalent cost of fuel (AWB(10%)fuel) for System B.
d) Calculate the total annual equivalent cost (AWB(10%)) of System B.
e) State your conclusion.
f) If the airline expects the price of jet fuel to rise significantly in the near future, will it make the same choice? Explain your answer briefly without any calculation.
In: Finance
A veterinarian is interested in determining whether or not an overweight dog would benefit more from daily 30 minute walks or from 30 minutes of daily play in a dog park. Design an experiment for the veterinarian, using 60 chubby dogs.
In: Statistics and Probability
According to Schaller, Park, & Mueller (2003) Past research has indicated that men report higher levels of racism and ethnocentrism than women. why do men report higher levels of racism and ethnocentrism than women? why not?
In: Psychology
With most customers having a smartphone, mobile apps are becoming an essential tool for hotels and other businesses in hospitality and tourism. If you were an app developer pitching to a hotel, how would you convince them to have one of their own?
In: Accounting