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 | $ | 1.10 | ||||
Electricity | $ | 2,800 | 0.50 | |||
Maintenance | 0.70 | |||||
Wages and salaries | 6,100 | 0.80 | ||||
Depreciation | 9,700 | |||||
Rent | 3,500 | |||||
Administrative expenses | 3,200 | 0.08 | ||||
The company expects to charge customers an average of $8.20 per car washed.
Required:
Prepare a flexible budget for October assuming either 8,500 or 9,000 cars are washed.