Auto Lavage_Flexible Budget

Auto Lavage_Flexible Budget

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				$	0.40
Electricity	$	1,400		$	0.05
Maintenance				$	0.10
Wages and salaries	$	4,500		$	0.20
Depreciation	$	8,300
Rent	$	2,000
Administrative expenses	$	1,700		$	0.01

 

For example, electricity costs are $1,400 per month plus $0.05 per car washed. The company actually washed 8,400 cars in October and to collect an average of $6.80 per car washed.

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