Vulcan Flyovers offers scenic overflights of Mount Saint Helens, the volcano in Washington State that explosively erupted in 1982. Data concerning the company's operations in July appear below: Flights (q) Revenue ($355.00q) Expenses: Wages and salaries ($3,500 + $88.00q) Fuel ($33.00q) Airport fees ($830 + $32.00q) Aircraft depreciation ($8.00q) Office expenses ($200+ $1.00q) Total expense Net operating income Flights Revenue Expenses: Wages and Vulcan Flyovers Operating Data For the Month Ended July 31 salaries Fuel Airport fees Aircraft depreciation Office expenses Total expense Net operating income Actual Flexible Planning Results Budget Budget The company measures its activity in terms of flights. Customers can buy individual tickets for overflights or hire an entire plane for an overflight at a discount. Actual Results 57 Required: 1. Prepare a flexible budget performance report for July that includes revenue and spending variances and activity variances. (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.) 57 $ 16,500 $ 16,500 8,480 2,045 2,514 456 425 13,920 $ 2,580 8,480 8,516 2,045 1,881 2,514 2,654 456 425 13,920 57 $ 20, 235 Vulcan Flyovers Flexible Budget Performance Report For the Month Ended July 31 456 440 257 255 13,764 13,440 $ 2,580 $ 6,471 $ 6,085 55 $ 19,525 Flexible Budget $ 8,340 1,815 2,590 57 $ 20,235 8,516 1,881 2,654 456 257 13,764 6,471 Planning Budget 55 $ 19,525 8,340 1,815 2,590 440 255 13,440 $ 6,085
Vulcan Flyovers offers scenic overflights of Mount Saint Helens, the volcano in Washington State that explosively erupted in 1982. Data concerning the company's operations in July appear below: Flights (q) Revenue ($355.00q) Expenses: Wages and salaries ($3,500 + $88.00q) Fuel ($33.00q) Airport fees ($830 + $32.00q) Aircraft depreciation ($8.00q) Office expenses ($200+ $1.00q) Total expense Net operating income Flights Revenue Expenses: Wages and Vulcan Flyovers Operating Data For the Month Ended July 31 salaries Fuel Airport fees Aircraft depreciation Office expenses Total expense Net operating income Actual Flexible Planning Results Budget Budget The company measures its activity in terms of flights. Customers can buy individual tickets for overflights or hire an entire plane for an overflight at a discount. Actual Results 57 Required: 1. Prepare a flexible budget performance report for July that includes revenue and spending variances and activity variances. (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.) 57 $ 16,500 $ 16,500 8,480 2,045 2,514 456 425 13,920 $ 2,580 8,480 8,516 2,045 1,881 2,514 2,654 456 425 13,920 57 $ 20, 235 Vulcan Flyovers Flexible Budget Performance Report For the Month Ended July 31 456 440 257 255 13,764 13,440 $ 2,580 $ 6,471 $ 6,085 55 $ 19,525 Flexible Budget $ 8,340 1,815 2,590 57 $ 20,235 8,516 1,881 2,654 456 257 13,764 6,471 Planning Budget 55 $ 19,525 8,340 1,815 2,590 440 255 13,440 $ 6,085
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Depreciation Methods
The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.
Depreciation Accounting
In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.
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Transcribed Image Text:Vulcan Flyovers offers scenic overflights of Mount Saint Helens, the volcano in Washington State that explosively
erupted in 1982. Data concerning the company's operations in July appear below:
Flights (q)
Revenue ($355.00q)
Expenses:
Wages and salaries ($3,500 +
$88.00q)
Fuel ($33.00q)
Airport fees ($830 + $32.00q)
Aircraft depreciation ($8.00q)
Office expenses ($200+ $1.00q)
Total expense
Net operating income
Flights
Revenue
Expenses:
Wages and
Vulcan Flyovers
Operating Data
For the Month Ended July 31
salaries
Fuel
Airport fees
Aircraft
depreciation
Office expenses
Total expense
Net operating
income
Actual Flexible Planning
Results Budget
Budget
The company measures its activity in terms of flights. Customers can buy individual tickets for overflights or hire an
entire plane for an overflight at a discount.
Actual
Results
57
Required:
1. Prepare a flexible budget performance report for July that includes revenue and spending variances and activity
variances. (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.)
57
$ 16,500
$
16,500
8,480
2,045
2,514
456
425
13,920
$ 2,580
8,480
8,516
2,045 1,881
2,514
2,654
456
425
13,920
57
$
20, 235
Vulcan Flyovers
Flexible Budget Performance Report
For the Month Ended July 31
456
440
257
255
13,764 13,440
$
2,580 $ 6,471 $ 6,085
55
$
19,525
Flexible
Budget
$
8,340
1,815
2,590
57
$ 20,235
8,516
1,881
2,654
456
257
13,764
6,471
Planning
Budget
55
$ 19,525
8,340
1,815
2,590
440
255
13,440
$ 6,085
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