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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%u2019s costs:


 Fixed Cost
per Month
Cost per
Car Washed
  Cleaning supplies  
     
$ 0.70     
  Electricity   $ 1,400     
$ 0.10     
  Maintenance  
     
$ 0.30     
  Wages and salaries   $ 4,700     
$ 0.40     
  Depreciation   $ 8,300     

     
  Rent   $ 2,100     

     
  Administrative expenses   $ 1,800     
$ 0.05     

For example, electricity costs are $1,400 per month plus $0.10 per car washed. The company expects to wash 8,000 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
8,100   
  Revenue $ 49,300   

  Expenses:
      Cleaning supplies
6,100   
      Electricity
2,170   
      Maintenance
2,640   
      Wages and salaries
8,260   
      Depreciation
8,300   
      Rent
2,300   
      Administrative expenses
2,100   


  Total expense
31,870   

  Net operating income $ 17,430   

Required:

Compute the company's activity variances for October. (Input all amounts as positive values. Leave no cells blank - be certain to enter "0" wherever required. 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.)
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 $      

Accounting Basics, Accounting

  • Category:- Accounting Basics
  • Reference No.:- M9956060

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