Vulcan Flyovers offers scenic overflights of Mount St. Helens, the volcano in Washington State that explosively erupted in 1982. Data concerning the company's operations in July appear below: Vulcan Flyovers Operating Data For the Month Ended July 31 Flights (g) Revenue ($355.00g) Expenses: Wages and salaries ($3,800 + $90.00g) Fuel ($32.00g) Airport fees ($830 + $34.00g) Aircraft depreciation ($9.00g) Office expenses ($200+ $1.00g) Total expense Net operating income Actual Flexible Planning Results Budget Budget 58 56 58 $16,400 $20,590 8,980 9,020 2,022 2,677 522 426 1,856 2,802 522 258 $19,880 8,840 1,792 2,734 504 256 14,627 14,458 14,126 $ 1,773 $ 6,132 $ 5,754 The company measures its activity in terms of flights. Customers can buy individual tickets for overflights or hire an entire plane for an

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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.