Reference no: EM132527702

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                              $0.80

Electricity               $1,200               $0.15

Maintenance                                      $0.20

Wages and salaries     $5,000               $0.30

Depreciation              $6,000

Rent                         $8,000

Administrative expenses $4,000                 $0.10

For example, electricity costs are $1,200 per month plus $0.15 per car washed. The company expects to wash 9,000 cars in August and to collect an average of $4.90 per car washed.

The actual operating results for August are as follows:

Lavage Rapide Income Statement

For the Month Ended August 31

Actual cars washed 8,800

Revenue$43,080

Expenses:

Cleaning supplies 7,560

Electricity 2,670

Maintenance 2,260

Wages and salaries 8,500

Depreciation 6,000

Rent 8,000

Administrative expenses 4,950

Total expense 39,940

Net operating income$3,140

Required:

Question 1: Calculate the company's revenue and spending variances for August. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.)