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I have 6 extensive questions and Id like to ask for explanations and answers to them. Thanks!
ONE:
In a recent news report, the following statement was made: “A report put out by brokerage house CLSA about Jet Airways said that the fall in ATF (fuel) prices has brought down the load factors (flight occupancy) required for the airlines to break even from 78 percent to 63 percent.” The load factor is the percentage of available seats on a flight that are occupied.
Discuss
TWO:
The cost per seat-mile on a major U.S. airline is 24.1 cents. In order to estimate the cost of flying a passenger from Pensacola, FL, to Denver, CO, we should multiply 1,184 miles by 24.1 cents.
Discuss
THREE:
Often airline frequent flier programs upgrade high volume passengers one, three, or five days in advance.
Discuss
FOUR:
You are currently working as a contractor building state of the art airports. One of the managerial accountants of the company you work for comes to talk to you about the budget for a project on which you have taken the lead. He wants to know your estimate for the cost of the project. You know that your future with the company depends on your performance in relation to this budget. Your best guess for this project is that it will cost $2,000,000.
Discuss
FIVE:
Pick an organization within the airline industry that you are familiar with or interested in learning about. Identify an example of when a favorable cost variable would not be good news for the performance of the organization.
Discuss
SIX:
JetSuite, a private jet charter company, prepares the master budget by taking each division manager’s estimate of revenues and costs for the coming period and entering the data into the budget without adjustment. At the end of the year, division managers are given a bonus if their actual division profit exceeds the budgeted profit.
Discuss
Recently you overheard a manager at JetSuite saying “If every division manager maximizes divisional income, we will maximize firm income. Therefore, divisional income is the best performance measure.”
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