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 (9) Revenue ($345.00g) Vulcan Flyovers Operating Data For the Month Ended July 31 Expenses: Wages and salaries ($3,600 $86.00g) Fuel ($32,00g) Airport fees ($540 $33.00g) Aircraft depreciation ($11.00g) office expenses ($230 $1.000) Total expense Net operating income Actual Results 53 $16,200 8,126 1,862 2,474 583 451 Flexible Planning Budget Budget 53 $ 18,285 8,158 1,696 2,589 583 283 13,496 13,309 $ 2,704 $ 4,976 51 $ 17,595 7,986 1,632 2,523 561 281 12,983 $4,612 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.
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 (9) Revenue ($345.00g) Vulcan Flyovers Operating Data For the Month Ended July 31 Expenses: Wages and salaries ($3,600 $86.00g) Fuel ($32,00g) Airport fees ($540 $33.00g) Aircraft depreciation ($11.00g) office expenses ($230 $1.000) Total expense Net operating income Actual Results 53 $16,200 8,126 1,862 2,474 583 451 Flexible Planning Budget Budget 53 $ 18,285 8,158 1,696 2,589 583 283 13,496 13,309 $ 2,704 $ 4,976 51 $ 17,595 7,986 1,632 2,523 561 281 12,983 $4,612 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.
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:25
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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 (9)
Revenue ($345.00g)
Vulcan Flyovers
Operating Data
For the Month Ended July 31
Expenses:
Wages and salaries ($3,600 $86.00g)
Fuel ($32.00g)
Airport fees (5840 $33.000)
Aircraft depreciation ($11.00g)
office expenses ($230+ $1.000)
Total expense
Net operating income
Actual
Results.
53
$ 16,200
8,126
1,862
2,474
583
451
13,496
$ 2,704
Flexible
Budget
53
$ 18,285
8,158
1,696
2,589
583
283
13,309
$ 4,976
Planning
Budget
51
$ 17,595
7,986
1,632
2,523
561
281
12,983
$4,612
The company measures its activity in terms of flights. Customers can buy Individual tickets for overflights or hire an entire plane for an i
overflight at a discount.
Transcribed Image Text:Required:
1. Prepare a flexible budget performance report for July that includes revenue and spending varlances 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.)
Flights
Revenue
Expenses
Wages and salaries.
Fuel
Auport fees
Aircraft depreciation
Office expenses
Total expense
Net operating income
Actual Results
$
S
53
16,200
8,126
1,862
2.474
563
451
13,400
2,704
Vulcan Flyovers
Flexible Budget Performance Report
For the Month Ended July 31
S
S
Flexible
Budget
53
18,285
8,158)
1,090
2.500
583
203
13,300
4,976
$
S
Planning
Budget
51
17,595
7,906
1,632
2.523
561
201
12,083
4,012
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