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Category > Accounting Posted 24 Aug 2017 My Price 5.00

Canadian company

EXERCISE 9–8 Preparing a Flexible Budget [LO3]

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 . . . . . . . . . . . . . . . . . . . . . . . . . . .

 

$0.70

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

The company expects to charge customers an average of $5.90 per car washed.

Required:

Using Exhibit 9–3 as your guide, prepare a flexible budget for October assuming either 8,000 or 9,000 cars are washed.

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Maurice Tutor
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Status NEW Posted 24 Aug 2017 01:08 AM My Price 5.00

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