Question 2 SkyAir is a large multi-national airline that has many responsibility centres: A. The South American division, which is responsible for operations in South America and has the authority to purchase new aircraft and add/cut routes. B. The Pilot Training group, which is responsible for training and professional development of SkyAir pilots. C. The reservations group, which is responsible for processing SkyAir reservations. D. The fuel group, which is responsible for SkyAir fueling aircraft. Required: What type of cost-centre (Cost, Revenue, Profit, Investment) should each of these be considered for evaluation purposes? Briefly justify your responses. Question 3 (continuation of Question 2) The maintenance division maintains the aircraft. Currently, the maintenance division is classified as a cost centre. From time-to-time, the maintenance division also does maintenance for other airlines, but this represents less than 1% of revenues. Should the maintenance division be a cost centre?

Question 2 SkyAir is a large multi-national airline that has many responsibility centres: A. The South American division, which is responsible for operations in South America and has the authority to purchase new aircraft and add/cut routes. B. The Pilot Training group, which is responsible for training and professional development of SkyAir pilots. C. The reservations group, which is responsible for processing SkyAir reservations. D. The fuel group, which is responsible for SkyAir fueling aircraft. Required: What type of cost-centre (Cost, Revenue, Profit, Investment) should each of these be considered for evaluation purposes? Briefly justify your responses. Question 3 (continuation of Question 2) The maintenance division maintains the aircraft. Currently, the maintenance division is classified as a cost centre. From time-to-time, the maintenance division also does maintenance for other airlines, but this represents less than 1% of revenues. Should the maintenance division be a cost centre?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Simulate your own franchising multinational corporation (MNC) in the hotel industry.Justify the form of your own MNC, based in the Caribbean, which trades with three countries outside of the North America region. Then examine issues related to foreign exchange management within the multinational corporation. Address the following: 1. The type of MNC, whether franchising, licensing, the exportation of a product sold through a distributor, etc. The rationale behind using this form of MNC should also be given. 3. The foreign exchange exposure of the company and how the company plans to manage this exposure.
How can the concept of unit-level activities be applied to an airline? More specifically, whatare two examples of unit-level activities for JetBlue? What steps has JetBlue taken to manage these unit-level activities more efficiently?
Baldwin Enterprises has two service departments, Personnel and Legal, and two operating divisions, Eastern and Western. Personnel costs are allocated on the basis of employees and Legal costs are allocated on the basis of hours. A summary of Baldwin operations follows: Employees Hours Department direct costs Required A Complete this question by entering your answers in the tabs below. Department costs Personnel allocation Legal allocation Total costs Costs Department costs Legal allocation Personnel allocation Total costs Personnel Required B Required C Legal Required: a. Allocate the cost of the service departments to the operating divisions using the direct method. b. Allocate the cost of the service departments to the operating divisions using the step method. Start with Legal. c. Allocate the cost of the service departments to the operating divisions using the reciprocal method. From Total Allocate the cost of the service departments to the operating divisions using the direct…
International Accounting Standards and Bonus Compensation The International AccountingStandards Board (ww.ifrs.org) is a London-based independent organization that develops and interprets International Financial Reporting Standards (IFRS). The mission of the IASB is to develop asingle set of high-quality, globally accepted accounting standards. About 150 countries throughoutthe world either permit or require IFRS for publicly held companies in their country. The U.S.continues to use generally accepted accounting principles (GAAP) as developed by the U.S.-basedFinancial Accounting Standards Board (FASB). The FASB, under the guidance of the SEC, hasdeveloped a plan in which the FASB and the IASB work together to complete a convergence ofIFRS and GAAP. The timetable for convergence is not firmly set, but many believe it may be onlya matter of time before U.S. firms will be using IFRS or something very much like it. Some of thenotable differences between GAAP and IFRS are that IFRS does…
Enterprise Risk Management The table below refers to seven industries. Required: For each industry, provide an example of a business risk faced by companies that compete within that industry. Then, describe an example of a control that could be used to reduce the business risk that you have identified.
Present 5 points each for the following: - 1. Benefits of Takaful Operations in Malaysia 2. Issues with Takaful Operations in Malaysia 3. Challenges in Takaful Operations in Malaysia 4. Potential Expasion for Takaful Operations in Malaysia
A-3
Reasons that a company might choose to acquire a business in a foreign country include all of the following except: Take advantage of free trade agreements Purchase local customer loyalty Local management understands local ing-hiet equatitions
F3
details on Foriegn Direct Investment & Regional Economic Integration to reflect on companies' decision making related to International operations
Multinational corporations are particularly affected by the range of environmental factors and accounting systems in the different countries in which they operate. Discuss some of the issues that MNCs are facing with regards to this matter. Provide examples.
Required Information Bentler Industries provides high-technology navigation and communication equipment for the aerospace and shipbuilding industries. It is organized into two divisions, Aeronautics and Marine. The division presidents are given wide decision- making authority that covers operations, marketing, and asset acquisition and disposal. Bentler evaluates the division presidents on, among other things, ROI in their respective divisions. ROI is based on after-tax divisional income and beginning-of-year assets. Divisional income includes allocated corporate overhead. For the most recent year (year 3), data from the two divisions shows the following: Marine Division Aeronautics Division Cost of sales Sales Allocated corporate overhead ($000) Other general and administrative costs R&D costs Total assets (January 1,Year 3) $ 16,700 $ 17,500 22,900 15,300 1,170 2,950 20,100 7,500 63,800 60,000 28,300 56,550 The tax rate applied at Bentler is 20 percent. Looking at the ROI results for…