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 $ 0.70 Electricity $ 1,200 $ 0.09 Maintenance $ 0.25 Wages and salaries $ 4,700 $ 0.30 Depreciation $ 8,300 Rent $ 2,200 Administrative expenses $ 1,800 $ 0.03 For example, electricity costs are $1,200 per month plus $0.09 per car washed. The company actually washed 8,300 cars in August and collected an average of $6.80 per car washed. Required: Prepare the company’s flexible budget for August.
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 $ 0.70 Electricity $ 1,200 $ 0.09 Maintenance $ 0.25 Wages and salaries $ 4,700 $ 0.30 Depreciation $ 8,300 Rent $ 2,200 Administrative expenses $ 1,800 $ 0.03 For example, electricity costs are $1,200 per month plus $0.09 per car washed. The company actually washed 8,300 cars in August and collected an average of $6.80 per car washed. Required: Prepare the company’s flexible budget for August.
Financial And Managerial Accounting
15th Edition
ISBN:9781337902663
Author:WARREN, Carl S.
Publisher:WARREN, Carl S.
Chapter22: Budgeting
Section: Chapter Questions
Problem 2E: Digital Solutions Inc. uses flexible budgets that are based on the following data: Prepare a...
Related questions
Question
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 | $ | 0.70 | |||
Electricity | $ | 1,200 | $ | 0.09 | |
Maintenance | $ | 0.25 | |||
Wages and salaries | $ | 4,700 | $ | 0.30 | |
$ | 8,300 | ||||
Rent | $ | 2,200 | |||
Administrative expenses | $ | 1,800 | $ | 0.03 | |
For example, electricity costs are $1,200 per month plus $0.09 per car washed. The company actually washed 8,300 cars in August and collected an average of $6.80 per car washed.
Required:
Prepare the company’s flexible budget for August.
Expert Solution
Step 1
A flexible budget is that budget which includes all the flexibility and change in the output. In comparison to Static budget, the flexible budget is more useful. It includes Fixed and variable both.
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 1 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Financial And Managerial Accounting
Accounting
ISBN:
9781337902663
Author:
WARREN, Carl S.
Publisher:
Cengage Learning,
Managerial Accounting
Accounting
ISBN:
9781337912020
Author:
Carl Warren, Ph.d. Cma William B. Tayler
Publisher:
South-Western College Pub
Principles of Accounting Volume 2
Accounting
ISBN:
9781947172609
Author:
OpenStax
Publisher:
OpenStax College
Financial And Managerial Accounting
Accounting
ISBN:
9781337902663
Author:
WARREN, Carl S.
Publisher:
Cengage Learning,
Managerial Accounting
Accounting
ISBN:
9781337912020
Author:
Carl Warren, Ph.d. Cma William B. Tayler
Publisher:
South-Western College Pub
Principles of Accounting Volume 2
Accounting
ISBN:
9781947172609
Author:
OpenStax
Publisher:
OpenStax College
Cornerstones of Cost Management (Cornerstones Ser…
Accounting
ISBN:
9781305970663
Author:
Don R. Hansen, Maryanne M. Mowen
Publisher:
Cengage Learning
Survey of Accounting (Accounting I)
Accounting
ISBN:
9781305961883
Author:
Carl Warren
Publisher:
Cengage Learning
Principles of Cost Accounting
Accounting
ISBN:
9781305087408
Author:
Edward J. Vanderbeck, Maria R. Mitchell
Publisher:
Cengage Learning