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:

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		$	0.07
Maintenance				$	0.25
Wages and salaries	$	4,800		$	0.20
Depreciation	$	8,100
Rent	$	1,900
Administrative expenses	$	1,600		$	0.02

For example, electricity costs are $1,200 per month plus $0.07 per car washed. The company expects to wash 8,200 cars in August and to collect an average of $6.40 per car washed.

The actual operating results for August appear below.

Lavage Rapide
Income Statement
For the Month Ended August 31
Actual cars washed		8,300
Revenue	$	54,580
Expenses:
Cleaning supplies		6,240
Electricity		1,744
Maintenance		2,290
Wages and salaries		6,800
Depreciation		8,100
Rent		2,100
Administrative expenses		1,664
Total expense		28,938
Net operating income	$	25,642

Required:

Calculate the company's revenue and spending variances for August.

Lavage Rapide Revenue and Spending Variances For the Month Ended August 31
	Actual Results		Flexible Budget		Revenue and Spending Variances
Cars washed (q)		8,300		8,300
Revenue ($6.40q)	$	54,580	$	53,120	$	1,460	F
Expenses:
Cleaning supplies ($0.70q)		6,240		5,810		430	U
Electricity ($1,200 + $0.07q)		1,744		1,781		37	F
Maintenance ($0.25q)		2,290		2,075		215	U
Wages and salaries ($4,800 + $0.20q)		6,800		6,460		340	U
Depreciation ($8,100)		8,100		8,100		0	None
Rent ($1,900)		2,100		1,900		200	U
Administrative expenses($1,600 + $0.02q)		1,664		1,766		102	F
Total expense		28,938		27,892		1,046	U
Net operating income	$	25,642	$	25,228	$	414	F

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