Identify and discuss briefly the three (3) Cost Drivers: Labour cost, fuel cost and maintenance cost may impact the costs incurred in the airline industry in the Caribbean. Provide appropriate examples to support your response.
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Identify and discuss briefly the three (3) Cost Drivers: Labour cost, fuel cost and maintenance cost may impact the costs incurred in the airline industry in the Caribbean. Provide appropriate examples to support your response.
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- Appreciate the impacts of fuel and labor costs on airlines cost structuresExplain the nature of cost-shifting taking place currently in the airline industry.Listed below are costs of providing an airline service. Classify each cost as (a) either variable (V) or fixed (F) and (b) either direct (D) or indirect (I). Consider the cost object to be a flight. Flight attendants and pilots are paid based on hours of flight time. Cost 1. Advertising 2. Beverages served on planes . 3. Regional vice president salary . 4. Depreciation (straight-line) on ground equipment . 5. Fuel used in planes 6. Flight attendant wages 7. Pilot wages . 8. Aircraft maintenance manager salary .
- Discuss two potential uses of the activity based cost information for decision-making, to the managers in EY Australia and Unilever?The WSJ recently presented data suggesting that United Airlines was not covering its costs onflights from San Francisco to Washington D.C. The article quoted analysts saying that Unitedshould discon- tinue this service. The costs per flight (presented in the article) included the costsof fuel, pilots, flight attendants, food, etc. used on the flight. They also included a share of thecosts associated with running the hubs at the two airports, such as ticket agents, buildingcharges, baggage handlers, gate charges, etc. Suppose that the revenue collected on the typi- calUnited flight from San Francisco to Washington does not cover these costs. Does this fact implythat United should discontinue these flights? ExplainConsider the Business Application "Assessing Product Profitability for Products with Large Development Expenses and Long Product Lives" from Ch. 7. This can be found on page 276 in the section on Managing Projects. Respond to the following in a minimum of 175 words: What estimates can a manager for Boeing or another aircraft manufacturer make that affect the reported profitability of a particular aircraft model? Why would such an accounting approach be adopted for managerial (not financial) accounting purposes? Are there any ethical issues that might arise? Explain your answer.
- Consider the business application," filing excess capacity 'below cost'. As noted there, the determination of cost depends on the way in which cost of delivery services are allocated to different customers. Assume that USPS has to customers people who made first class letters and business that ship packages to customers. Management at USPS wants to understand how profitable each customer Group is. how would you recommend the costs of the USPS network (Trucks,buildings,carriers and so on)be allocated to these two customers to answer that question?Select a manufacturing organization for justifying the following quote “Companies with labor incentive manufacturing processes are most likely to benefit from sending manufacturing operations overseas because the bulk of potential cost savings relate to labor costs”. Q. Identify the 1) Relevant Costs of the decision mentioned above. 2) Irrelevant Costs of the decision mentioned above. 3) Benefits in such a decision for the company, as mentioned above in the quote.List three observable and three hidden quality costs that could occur in the airline industry related to the quality of service provided.
- a. How cost accounting helps tourism firm in determining the price? b. Which kind of decision can be taken by tourism firm using cost accounting method? c. Which technique of costing can be used in tourism firm and why that technique can be used? d. What are the benefits enjoyed by tourism firm by adopting cost accounting?How would the classification of costs as direct or indirect change when the cost object shifts from the Cleveland airport sock vending machine to the overall sock product line at Stance?You have been asked by management to classify the costs associated with the start-up of this new product line. Using the cost information provided below, classify each cost under the appropriate heading according to the chart provided below. Note that some costs may be classified under more than one heading. For example, a cost may be a fixed cost and a period cost. Name of cost Variable Cost Fixed Cost Direct Materials Direct Labor Factory Overhead Period Cost Prime Cost Conversion Cost Carlson “New Product” Cost Information Cost Amount Cost Type Depreciation on Building (annual) $ 10,000 Direct Labor Cost (per unit) $ 75 Direct Materials Cost (per unit) $ 60 Factory Utilities (per unit) $ 8 Indirect Materials (per unit) $ 4 Interest on Investments (annual) $3,000 Machinery Rental (monthly) $ 6,000 Marketing (annual) $ 35,000 Rent from Tenant (annual) $40,000…