Exercise 10-10 Prepare a Report Showing Activity Variances [LO2]
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 $4.90 per car washed.
The actual operating results for August appears below.
Lavage Rapide
Income Statement
For the Month Ended August 31
Prepare a report showing the company's activity variances for August. (Leave no cells blank - be certain to enter "0" wherever required. Input all amounts as positive values. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Omit the "$" sign in your response.)
Lavage Rapide
Activity Variances
For the Month Ended August 31
Activity Variances
Revenue
$
1 (0%)
U (5%)
Expenses:
Cleaning supplies
1 (0%)
None (0%)
Electricity
1 (0%)
None (0%)
Maintenance
1 (0%)
U (0%)
Wages and salaries
1 (0%)
U (0%)
Depreciation
1 (0%)
F (0%)
Rent
1 (0%)
U (0%)
Administrative expenses
1 (0%)
U (0%)
Total expense
1 (0%)
U (0%)
Net operating income
$
1 (0%)
U (5%)
Exercise 10-10 Prepare a Report Showing Activity Variances [LO2]
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.
The actual operating results for August appears 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:
Prepare a report showing the company's activity variances for August. (Leave no cells blank - be certain to enter "0" wherever required. Input all amounts as positive values. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Omit the "$" sign in your response.)
Lavage Rapide
Activity Variances
For the Month Ended August 31
