Management Accounting: Information for Creating Value and Managing Resources

Managerial accounting focuses on the needs of internal users (managers) and on data relevant for decision making.

|Selling Price per|Year 1 Sales Units |Year 1 Year End Stock units |Year 2 Unit Sales |Sales Revenue Year 1 |

Rivalry among the Existing Players: The level of competition between the airlines is very high. One reason for this is the increase in popularity of low-cost airlines, who employ innovative business models to differentiate themselves and drive the profitability of their businesses. Another reason is attributable to the nature of operation of the airlines – the marginal cost of having extra passengers on a scheduled flight is close to zero, which implies that airlines are capable of varying the price of air tickets from time to time, or even engaging in price wars with their rivals. For instance, the recently banned operation of Tiger Airways has created opportunity for two other major domestic airlines in Australia, Jetstar and Virgin Blue, to increase prices in order to take advantage of the less competitive environment and to increase their market shares.

In the duration of 2011 to 2002, there were 50 global airlines that focused on operating scheduled services from and to Australia (Poulton, 2014). These included dedicated operators of transport. Qantas has been recognised as the only global airline situated in Australia. In the year 2001 to 2002, the share market of Australian airlines fell from 37.5% to 35.2%. This was partly due to the fact that they had ceased the operations of Ansett International due to the collapse of Ansett Group. Ansett international was a company owned by Australia having the majority shares of 51%. In the duration of 2001 to 2002, the market shares of Qantas regarding passenger routes from and to Australia had been 34.5%. This calculation was on the basis of passengers being carried.

8. A consumer values a car at $30,000 and it cost a producer $20,000 to make the

A financial report that summarizes the amounts and types of costs that were incurred in the manufacturing process during the period is a: Manufacturing statement.

The following data were taken from the records of Clarkson Company for the fiscal year ended June 30, 2014.

Company operates in the Industrial Sector – Services, and Industry – Regional Airlines. According to the Standard Industrial Classification System (SIC), company belongs to the industry group 451: Air

3,4- The Airline industry and the market The airline industry is large, specially in the United States, mainly due to the “ Deregulation” of the industry. In 1938, the Civil Aeronautics Board was created to control the growth of the air transportation industry. This board had the authority to control entry, exit, prices and methods of competition. In the late 1970 this structure was found inefficient and in 1978 deregulation took place. Due to the deregulation of the industry competition intensified, prices dropped, and the number of people travelling increased. Many new companies emerged and regional airlines saw deregulation as an opportunity to expand. Due to the rise in competition, by 1986 mergers started to take place and in 1987 64.8% of the market was controlled by the four largest airlines. The demand for air travel is determined mainly by price, studies revealed that half of the leisure travellers and on quarter of business travellers did not have a preference for a particular airline, which means that prices determined the

“Ending Inventory” = “Beginning Inventory” ($22,000) + “Purchases” ($30,000) – “Cost of Goods sold” ($24,000) = $52,000 - $24,000 = $28,000

Qantas’ External environment consists of competitors, government, laws and regulations. In the travel and aviation industry, competition is a huge factor. Over the years we have seen incredibly successful airline companies, such as Ansett, crash due to the fact that they cannot compete with their cheaper international competitors. Qantas has dominated the Australian domestic market, however, internationally things haven’t been as easy. Being one of the more expensive airlines, Qantas already struggles to keep up with its major competitors such as Emirates and Thai, both of which provide much better ‘bang for your buck’. With globalization becoming a factor in modern business, Qantas couldn’t afford to remain a domestic service provider. In order for them compete, Qantas needed to broaden their services and become a dominant International airline.

The Airline Deregulation Act of 1978 within the United States promulgated an era of unencumbered competition within the market, opening the floodgates for newer carriers – with a variety of lower pricing structures – to compete with formidable incumbents. Numerous carriers consequently filed for bankruptcy, and many of the industry leads consolidated their airlines to increase their power. Within the last twelve years alone, a series of bankruptcies and mergers have resulted in ten major U.S. airlines consolidating into four market-dominating mega-carriers: American, Delta, Southwest, and United. Why is

The Airline Deregulation Act of 1978 within the United States promulgated an era of unencumbered competition within the market, opening the floodgates for newer carriers – with a variety of lower pricing structures – to compete with formidable incumbents. Numerous carriers consequently filed for bankruptcy, and many of the industry leads consolidated their airlines to increase their power. Within the last twelve years alone, a series of bankruptcies and mergers have resulted in ten major U.S. airlines consolidating into four market-dominating mega-carriers: American, Delta, Southwest, and United. Why is

For instance, the concept of cost estimation which assists in estimating future expenditure as the expenditure depends on the cost of the respective activities can be applied in the setting of a budget which is simply an estimate and schedule of all costs required to be assigned to an activity. One can make an estimation of the resources required for an activity by applying the cost estimation techniques. Since there are limiting factors to each activity such as scarcity of resources for activities, the concept of constraints can be applied together with the concept of cost volume profit analysis to ensure that maximum benefits are driven from the scarce resources and the number of activities that are available. This facilitates the allocation of resources that most equitable and profitable. The theory of constraints is also applicable in the process of setting up budgets. In setting up budget one considers the amount of resources that are available and cannot therefore set a budget plan that exceeds the amount of resources that are available. This implies that the budget is constrained by the amount of

All businesses have a large amount of stakeholders. Pauline (2013) defined that stakeholder is a general term to indicate all those who might have a legitimate interest in receiving financial information about a business because they have a ‘stake’ in it. All stakeholders must need accounting information to help them making better decision. Most of the businesses have provided different sort of accounting information like balance sheet and income statement. However, no all the stakeholders need the same information and the purpose is different. Therefore, the main question is what information is required and the proper use of the information. In the following of the passage, it will discuss about the question from different stakeholders.