Lavage Rapide is a Canadian company that owns and operates a large automatic car wash facility near Montreal. The following table provides estimates concerning the company’s costs: Fixed Cost per Month Cost per Car Washed Cleaning supplies $ 0.50 Electricity $ 1,500 $ 0.06 Maintenance $ 0.15 Wages and salaries $ 4,800 $ 0.30 Depreciation $ 8,100 Rent $ 2,100 Administrative expenses $ 1,700 $ 0.04 For example, electricity costs should be $1,500 per month plus $0.06 per car washed. The company expects to wash 8,100 cars in August and to collect an average of $6.80 per car washed. The company actually washed 8,200 cars in August.
Lavage Rapide is a Canadian company that owns and operates a large automatic car wash facility near Montreal. The following table provides estimates concerning the company’s costs: Fixed Cost per Month Cost per Car Washed Cleaning supplies $ 0.50 Electricity $ 1,500 $ 0.06 Maintenance $ 0.15 Wages and salaries $ 4,800 $ 0.30 Depreciation $ 8,100 Rent $ 2,100 Administrative expenses $ 1,700 $ 0.04 For example, electricity costs should be $1,500 per month plus $0.06 per car washed. The company expects to wash 8,100 cars in August and to collect an average of $6.80 per car washed. The company actually washed 8,200 cars in August.
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter16: Financial Statement Analysis
Section: Chapter Questions
Problem 3E
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Lavage Rapide is a Canadian company that owns and operates a large automatic car wash facility near Montreal. The following table provides estimates concerning the company’s costs:
Fixed Cost per Month | Cost per Car Washed | ||
---|---|---|---|
Cleaning supplies | $ 0.50 | ||
Electricity | $ 1,500 | $ 0.06 | |
Maintenance | $ 0.15 | ||
Wages and salaries | $ 4,800 | $ 0.30 | |
$ 8,100 | |||
Rent | $ 2,100 | ||
Administrative expenses | $ 1,700 | $ 0.04 |
For example, electricity costs should be $1,500 per month plus $0.06 per car washed. The company expects to wash 8,100 cars in August and to collect an average of $6.80 per car washed. The company actually washed 8,200 cars in August.
Required:
Calculate the company's activity variances for August.
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