Case Study in Managerial Accounting Southwest Airlines is a company that is known for its low ticket prices and profitability despite the highly risky industry in which it operates. This essay examines the cost behavior, cost volume profit (CVP), activity based costing (ABC), budgeting process, costing and decision making policies of the firm. The essay will discuss how the airline integrates these concepts in its daily operations. Part A Southwest Airlines Co. is an airline company that offers
other ingredients are added just to make cigarettes taste better. The Food and Drug Administration has banned flavored cigarettes because it would entice youth to start smoking, and they are considering the banishment of menthol flavored cigarettes. Even though cigarette companies claim that there is no difference in the side effects of menthol cigarettes compared to non-menthol cigarettes, it has been argued that menthol flavored cigarettes are favored by certain groups, whose members are more likely
have to take into account the opportunity costs. 4. Explain why. Explain why even higher support prices would not help honey farmers in the long run. Normally if you are not making a profit then you are probably just breaking even. If the total revenue equals the total costs it is breaking even. The honey farmers costs maybe higher than the big size companies but the midium size companies may still be low enough to break even at the market price.
its assets to generate revenue. The formula for calculating asset turnover ratio is total revenue divided by total assets. As a general rule, the higher the resulting number, the better the company is performing. Asset turnover ratio is the ratio of the value of a company’s sales or revenues generated relative to the value of its assets. The Asset Turnover ratio can often be used as an indicator of the efficiency with which a company is deploying its assets in generating revenue. Asset Turnover = Sales
wants. * Scarcity leads to CHOICE Choice * A situation caused by scarcity. * Leads to OPPORTUNITY COST Rational Choice (Marginal Cost & Benefit) * Rational consumers will use all available information as they act to achieve their goals * Marginal Benefit – The benefit that arises from an increase in an activity * Marginal Cost – The opportunity cost that arises from an increase in that activity Normative vs Positive * Normative – “what ought to be” (Subjective)
ratio, and revenue and expense ratio for the years 2003 and 2004. 2003 2004 Current Ratio: .87 .90 Long Term Solvency Ratio: 1.38 2.06 Contribution Ratio: .51 .49 Programs and expense ratio: .72 .77 General/ management/expense ratio: .28 .23 Revenue
service due to government regulations, it can outsource the medications for the service. The outsourcing may help in reducing the variable overheads. * The center should promote the off-campus programs as they can be a major source of revenue. The services which can be provided in the off campus program can be Case Management, Individual Counseling, Crisis Intervention, Ambulatory Detoxification & Patient Assessment. Group Counselling can be provided in corporates. These services can
promotion in order to increase revenue hours up to 30% Option 1: We pull 138 commercial revenue hours from March Exhibit 1. Multiplying that by 70%, we come up with 97 hours. Commercial Revenue Hours = 138 hours x (1-0.3) = 97 hours Using the intercompany-billing rate per hour of $400 and the intercompany demand of 205 hours we calculate revenue and expenses. Revenue: (205 hours x $400) + (97 hours x $1,000) = $82,000 + $97,000 = $179,000 Expenses: $28.70(variable cost) x (205 hours + 97 hours) =
Article being reviewed: Cisneros-Montemayor, A., Sumaila, R., Dyck, A., Huang, L., Jacquet, J., Kleisner, K, & et al. (2012). Impact of the Deepwater Horizon well blowout on the Economics of U.S. Gulf fisheries. Canadian Journal of Fisheries and Aquatic Sciences, 69(3), 499-510. doi:10.1139/f2011-171 retrieved form ResearchGate Article Summary The article studied the effects of the oil spill from the Deepwater Horizon oil rig operated by British Petroleum in the Gulf of Mexico on April 20, 2010.
market conditions. Accounting Profit: Profit is the difference between the total revenue subtracted by the total cost. Total revenue is simply the total amount of money that a firm receives from its sales and total cost means the monetary cost of production. Accounting profit can be modelled with a very simple equation of: π= TR-TC where π stands for the profits made, TR for total revenue, and TC for total monetary cost of production (π is used to represent profit since the variable P is used to stand