Auto lavage is a canadian company that owns and operates a, Ask an Expert

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Auto Lavage is a Canadian company that owns and operates a large automatic carwash facility near Quebec. The following table provides data concerning the company's costs:

Fixed Cost
per Month

Cost per
Car Washed

Cleaning supplies			$	0.40
Electricity	$	1,100	$	0.08
Maintenance			$	0.10
Wages and salaries	$	4,300	$	0.20
Depreciation	$	8,200
Rent	$	2,200
Administrative expenses	$	1,700	$	0.01

For example, electricity costs are $1,100 per month plus $0.08 per car washed. The company expects to wash 8,300 cars in October and to collect an average of $5.90 per car washed.

The actual operating results for October appear below:

Auto Lavage Income Statement For the Month Ended October 31
Actual cars washed		8,400
Revenue	$	51,070

Expenses:
Cleaning supplies		3,820
Electricity		1,734
Maintenance		1,070
Wages and salaries		6,320
Depreciation		8,200
Rent		2,400
Administrative expenses		1,683

Total expense		25,227

Net operating income	$	25,843

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M9955355

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